This is what the upper bell housing looked like. I was able to get another upper bell housing from Jon and very much appreciated getting it. That is why the pony pinion linkage is not going to be the same. I do not know if that was a Caterpillar repair. 
What would have caused so much damage in the first place?
I want to know if the pony engine transmission that the videos show; can be removed without pulling the pony engine? I want to keep the pony engine as it crank starts with two pulls.

Still does not answer question, did assembled pinion and sleeve engage ring gear and latch engaged in ring gear, by pushing assembly in by hand prior to putting bell housing cover on.

Yes it did latch. However, it required a lot of pressure on pinion latches to get them to release.

Hi Team,
OK now we are getting somewhere.
If the drive links failed then it can be from any or all of the following issues, mis-alignment of the engine to the main transmission mounted main clutch due to :-
failed front engine mount, bent chassis rails OR most likely with the pony pinion issues you have, that the main engine crankshaft thrust washer system has failed allowing the crank to move excessively back and forth in the block. This allows the flywheel ring gear to be out of position and cause your pony pinion issues.
My RD6 had the bronze thrust washer failed when I bought it and it also had excessive end float as it is the same set up as the D7.
Required removal of front timing cover etc. to access the thrust system as shown in the scans.
Hope this helps,
Cheers,
Eddie B.