The PTO clearance is adjusted with a gasket stack.
One starts with a thin one, and run up a couple of the mounting nuts gently to check if it easy to turn the output shaft by hand with it in gear. It probably won't be, so dismount it and add another gasket. Keep at it until you can easily rotate the shaft, turning the trans countershaft as well (trans in neutral, a friend working the clutch), and feeling a little slop in it. You'll be OK, with it that way.
More PTO's are ruined by mashing the gears into each other and trying to use it that way.
There may be a process to set the backlash with gages, but working down past all the gears in that trans is just about impossible. It is a somewhat greasy job, as invariably some gear lube will be dripping on your hands (you did drain it all out?).
Then you get to fight the control lever hookup to fit, and the clevises will never get full operating positions on the first stab. Be patient, laying on your back is supposed to be restful...
Please don't forget to stage the driveshaft ahead of time. Also, take a hint from the 900-series trucks and install a second set of shackle mounts on the bottom of the bumper, usually with new longer bolts. It adds a bit of extra strength to the bumper assembly and gives you 2 more places to hook to.
Don't forget the correct shear pin on the winch input flange. It may save your setup from an expensive failure. I've seen a 5-ton or two over the years where the pin was just a bolt, and the whole winch was almost peeled right off the truck from pulling way too much weight.