It should slide in and out freely. How it spins means nothing.
Not sure where to start. Position the drive on some blocks of wood or the likes so that the input shaft on the drive is at the same height as the center of the gimble bearing and the prop shaft is parallel to the bottom. It is very difficult to impossible to install it as if it is trimmed out. About the time the drive begins to slide over the studs you will need to rotate to engage the splines. Once you have engaged the splines you'll need to ensure the shift linkage engages. At this point I will grab cav plate with my fingers and thumbs over the cylinders near the forward end and squeeze. Sounds silly but it will help to push the drive in evenly. It will shimmy forward until the point you need to overcome the resistance of the o rings { which should be greased} penetrating the gimble bearing. At this point it may need a little persuasion. I drive it in with my shoulder. Occasionally, A kick or a "love tap with a heavy block of wood is necessary.
I hope this is more helpful than confusing.