You guys have given me some good stuff to think of and check out. Alignment, alignment, alignment - I think thats where I went wrong... but maybe its a burr on the spline (tranny shaft).... or lack of prime?
I did not prime the cylinders with motor oil first. Could it be that simple to solve? I applied alot of assembly lube to the cylinders when I was building so I figured it good enough...
I suppose its worth trying before I start ripping stuff apart.