PROBLEM SOLVED ! ! ! There is a gravity switch or pendulum inside the seat belt retractor and i must have turned it upside down when i untangled the knots. I had to remove the retractor again, tap on it lightly with a rubber mallet while pulling the belt in and out. I could feel a "ratchet" inside the retractor but managed to repeat this technique again and again. Each time I could gain a couple more inches of slack in the seat belt until it finally reached a point where it freespooled and worked like it was designed to.
After getting the slack I needed I was able to bolt the retractor back in, install the bottom bolt in the seat belt strap and it works like a charm. Live * Learn.