Finally I decided with all my 'plumbing knowledge' I just couldn't do this one alone. I removed all the pieces and headed out to a local hardware store known for their superior customer service. The problem turned out that I was missing a divertor washer at the end of the stem. The part cost was about $1. Why didn't any of those plumbing books I have show this little washer at the end of the stem? Anyway I am happy now... I have my great shower back.