The centreline of the motor and the centreline of the rearend should be parellel.
If tranny is down 3* then pinion should be up 3*.
You need to set your pinion angle with the suspension loaded. Tires on, sitting on a flat surface.
There's a good chart in this thread.
http://67-72chevytrucks.com/vboard/s...d.php?t=569350