You cannot acuurately determine the brake drag by the drum alone. A very slight drag with the wheels on, might seem significant with only the brake drum. Your adjuster screw should NOT be turned all the way down, that suggests something is wrong. It might be that the parking brake is out of adjustment and holding the shoes apart, or it might be any number of other issues depending on exactly which style rear brakes your car has.

Re-checked part numbers. They are correct. Rear drums for 1994 T&C FWD 3.8L with 15 inch wheels (drum inside diameter 9mm, Height-106mm). The shoes are also correct (9x2.5").
Checked part specs for other kinds of drums: The 14" wheel drums would not fit the wheel lug layout or center hub diameter. The AWD drums would be larger than the FWD ones (diameter 11mm, Height 116mm) but I am POSITIVE that my vehicle is NOT AWD it is FWD.
I re-checked the installed components... everything looks right. I even checked the parking brake cable adjustment.
*Before I started the brake job I took pictures of Left and right brake assembly's to insure that I put everything back the same way. I doubled checked everything against the pictures and the Haynes manual and the Chilton manual.
Currently- both wheels drag (you might be able to free spin the wheel one revolution). The drum/shoe contact varies as the drum is rotated. The parking brake is off. The top of each shoe is fully seated against the anchor pin. The bottom of each shoe is fully seated against the adjuster lever (which is all the way in).

*only thing I see, the drivers side adjuster cable that goes to the overload spring is a little slack compared to the other side.
Otherwise - I'm stumped.

1.)You don't mention the brake cylinders. Did you rebuild/replace them? If not they may be stuck or corroded such that they don't retract enough for the additional thickness of the new shoes.

2.) Or the shoes just are not centered on the backing plate. Apply the brakes real hard to center em up. Then readjust em.

I'd bet on #1.

I didn't replace the brake cylinders, but the curved tops of the shoes are fully seated against the anchor pins. If they weren't seated properly I would assume that they would be lifted off the pin.

I have checked the parking brake adjustment... it had no affect on the problem.

I just re-installed everything once again. This time I burnished the high spots on the backing plate and greased them (I've cleaned and greased them each time before, but now I'm being even more meticulous). I've installed a new hardware kit with all the springs etc.

When I finished the results were still the same as my first post. I called a local garage and the mechanic told me that as long as the drum and shoe had a slight drag on them when turned by hand then everything should be o.k. and that the auto adjuster being all the way in is not a worry.

Some have suggested I cut the drums... I cannot see the value in cutting the drums just because the aduster is all the way at the minimum. Especially if the shoes are supposed to have some drag on the drum to begin with. Even though there is some drag... I can still pull the drum off and put it on again, it's not so tight that it prevents access.

The reason I replaced the brakes to begin with is that they failed inspection. According to the test results the rear brakes were not grabbing enough. So if I pass re-inspection tomorrow and do not exhibit any further braking problems I will consider the case resolved. If anyone has any further remarks they will be welcome and I will answer any concerns if I am able. (I would post an image but I'm still confused on how or where to upload.)

I thank everyone for their input.

You are applauded for your thorough meticulus approach. Particularly for double checking. But! To replace the shoes and neglect the cylinders is a mistake.

You now know that you must compromise between enough scrape and not enough scrape.

Initially the thing is you lacked brake pressure. I never heard of that test and don't know how it was done. You must understand the pressure is derived from 2 sources:

1) Primarily from hydraulic force applied via the cylinders. There are 2 pistons in there (one for each shoe) and one or both pistons can be riding up against a ridge of gunk limiting their travel. In that case a new thicker lining will apparently increase the brake pressure because those pistons are moved back in away from the ridge to where they move freely. It's a temperary fix. There is enough adjustment in any properly functionng brake system such that the lining can be worn down to the metal shoes (or rivets if you are dumb enough to use them) w/o losing pressure. Also:

Or one or both pistons can be frozen in place and immobile. The cylinders can be badly pitted resulting in loss of prssure. The leaking fluid may or may not drible out and be visible. You simply cannot know w/o taking them apart. Sometimes the pistons have to be driven out with a hammer and punch or preferably with a press. The entire assembly can be replaced or you can get a rebuild kit.

2.) Further pressure is derived from what happens when the linings touch the drum. With the vehicle moving forward the drum actually rotates the partially floating brake mechanism ever so little such that the grip is actually increased with most of the force on the rear shoe. That's why the rear shoe is usually (but not always) bigger then the front shoe. Also why braking in reverse is diminished - but, of course, reverse speeds are low. If one shoe is not working or only partially working due to a stuck piston this process fails in proportion ie resulting in lowered braking effectiveness.

You have done a good partial brake job.

Do the cylinders and you can drive down the road knowing you did it right.

OUCH! mxypix you are so right. 100%.

Before I read your post today this is what happened...

I failed inspection same as before. ARRGH!

After re-evaluation and a visual inspection by a licensed mechanic the only conclusion is that the "rear wheel cylinders" are frozen and need replaced. I was hoping to avoid this because I am not familiar with ABS systems.
(I was so convinced that the drums were the only problem... I didn't figure that there were multiple problems.) -oops my bad.

Next Question: Do I need to use a DRB-II scan tool if I am only replacing the Wheel cylinders and not the modulator? I mean, after I depressurize the system by pumping the brake pedal 40 times or so (engine off). Then replacing the wheel cylinders; can I then proceed to bleed the system at the wheels just like any other brake system?

In addendum to my previous post.

I have a Bendix 4 ABS system according to the Chilton and Haynes manuals. They cover manual and pressure bleeding of the brake lines for Bendix 10 system. Bendix 10 brake line procedure... "The individual lines may be bled manually at each wheel using the traditional 2 person method."

But for Bendix 4 systems they only cover bleeding of the modulator.

For installation of the wheel cylinders it ends with, bleed the brake system.

The bleeding procedure under Wheel Cylinders and Calipers shows step by step diagrams which are labled "Proper method for bleeding the brake system-non ABS equipped vehicles". (?)

Can I bleed each wheel using the traditional 2 person method also?

Beats the hell outa me. I dunno. Anybody?

Welcome to a sliver of the world of experience as a mechanic Bruce. As soon as you said that the adjuster was turned all the way down, there was no way that something wasn't wrong. The problem is, without seeing the car and inspecting it myself there wasn't much that could be done to help you out. Did you know many people discount the value of state inspections? Do you know how many people feel that "anyone" can do brakes and that it is simple mindless work?

Now do you know you have only scratched the surface in regards to how many potential problems could be easily overlooked?

As far as bleeding the brakes go, if you don't run the master cylinder low on fluid, you should be OK bleeding the wheel cylinders without a scan tool. If you do happen to get air into the ABS unit, then a scan tool combined with a pressure bleeder system is the correct way to bleed the brakes and solve that problem. Yes the DRBII would be the original scan tool for this vehicle, and a DRBIII with a super card with legacy software would also work. I suspect the Snap-On Solus/Modis may also have the ability to command the ABS bleeding operation because they have been working very hard to add that function for as many systems as is possible, but I don't know for certain if it can or not. Someone will simply need to hook one up and go to the ABS system and see if the scan tool supports the automated bleeding procedure or not.

BTW, frozen wheel cylinders would prevent the brake shoes from sitting correctly against the anchor pin. They may have been close to it, but there must have been some space to make them drag. The bigger problem is, imagine if the wheel cylinders had happened to be frozen, and in just the right position to not cause the shoes to drag. You would have had the car out on the road with only the front brakes working. All you would need then would be to get into a heavy braking situation, and you could easily have experienced brake fade, and then who knows what could have happened. I'm glad you progressing towards getting this fixed and safe.

Now if only the tech who's knowledge and experience was required to solve this problem was earning a return on the investment he made to be able to diagnose this by earning your business and getting to repair the car.

"Actually, I've been thinking it ever since I got here:
Why oh why didn't I take the BLUE pill?" -The Matrix. :)

I can very much appreciate the depth of knowledge and experience most mechanics possess. The only reason I pursue these DIY repairs is that I'm really strapped for cash.
This problem was resolved through the inspection results, the knowledge contributed by this forum (and others), as well as my own labor. The mechanics in this instance basically verified what we already suspected. The reason I say this is as follows:
Prior to my initial state inspection I had taken the car to a garage (a national chain) and told them on at least two seperate occasions (this year) that I think my brakes are low or mushy. They checked them out and said they were o.k.
Now, after they have seen the inspection and re-inspection failure reports and after I have already replaced all but the wheel cylinders they have concluded that it is the wheel cylinders. I told them that I was kind of perturbed that they didn't find this problem during their earlier inspections. They became defensive and said that they didn't have the equipment to determine whether the cylinders were bad. I said that if you couldn't determine it then, how can you determine it now except for the inspection reports and replaced parts that I've already made? This is not the first "problem" I've had with service there [-it's a long story]. Consequently, I'm taking my business to a local garage that has been refered by a friend.
(I thought perhaps I might try to fix it myself, but I don't think I want to tangle with bleeding the ABS.)

My thanks to mxypix and you (john_g) and all the other experienced mechanics out there that give of their time and knowledge to assist those of us who struggle to try and make legitimate and safe repairs to our vehicles.

The Matrix, one of the best series of movies ever.

Now, watch this. You wrote "Prior to my initial state inspection I had taken the car to a garage (a national chain) and told them on at least two separate occasions (this year) that I think my brakes are low or mushy"

Seized wheel cylinders, are reported to be the issue now for the difficulty installing the rear shoes correctly.
Fact #1, fluid is incompressible, Fact #2 a seized wheel cylinder is a hydraulic dead end and that results in a hard pedal, not a mushy one. Hmmmmmm.....

You wrote "I told them that I was kind of perturbed that they didn't find this problem during their earlier inspections. "

A national chain. Let me guess, they do brake inspections for free, right? Need I say more about what free inspections are really worth?

You wrote. "They became defensive and said that they didn't have the equipment to determine whether the cylinders were bad."

That's absurd on their part (or at least on the part of the person you were speaking to) if they really said that. I work to explain how the industry functions when things are actually being done correctly, even when it does not seem apparent to the average vehicle owner that the shop is operating correctly. But some practices that many of the chains employ are in serious need to revision. I work from this side to try and get them to learn why their approach is often incorrect. Seriously, if they cannot identify frozen wheel cylinders, even if the symptom as described by the driver is completely opposite of what they would feel like, then they need to either attend more training, or get out of the trade. JMHO.

I do two different eight hour continuing educational professional brake classes. One is a basic and the second one is for advanced ABS controls. I can't tell you how many times I get someone into one of those classes who have been doing brakes for a number of years that walks in the door thinking the class is below their experience, and I rock their world in the first half hour.

Sadly, when I go and instruct for many of the chains I can teach the techs the mechanics of the business, but the management side is rarely in attendance in order to learn how to approach this area of service as professionally as it needs to be done.

In short, free brake inspections are overpriced for their resultant value.

Bingo! It was a Free brake inspection.

Although I must say that I've given them a lot of business in the past and wasn't there soley because the brake inspection was free. My main reason for choosing them is that I do not drive (medical reasons) and we only have one car. So I have to take it to a place that has a waiting room and most local garages do not. Since I can't drop the car off and most garages including dealerships do not provide a shuttle service anymore, I have little choice. Sometimes my wife and I have waited there 8 hours for repairs. I used to go to the dealer until he told me that my flywheel needed to be replaced (long story short it didn't and years later the vehicle is still running without incident.)
Because I no longer drive may be why my perception of the brake pedal is not accurate. My wife thought the brakes were perfectly fine. When I stepped on the pedal it traveled until it became firm, then slowly depressed a few more inches... I thought that there may be air in the line (my feeling of mushy). The distance of pedal travel gave me the impression that it was going too far (close to the floor ergo my feeling of low). -But of course I don't drive anymore so I'm basing it on automobiles I've driven in the past and not from actually driving this vehicle on a daily basis.

But you are so right, beware of free services and I'd like to add, when you find a good mechanic stick with them.