Sounds like it very well could be the Teflon rings, as it is super easy to cut them going together.
I grease (assy lube) pack the heck out of the ring grooves and then press the rings down into them so they are basically glued in.
I have even bent the ends before putting them in the groove so the tapered ends don't stick up.
As far as that causing a no shift I don't remember, sorry.
I do know that a loss of fluid pressure in the circuit can definitely cause shift issue's though.
