[Promod]

After about 5 hours work got this trans as smooth as GLASS!!
The case is too narrow as Gustav said.
I ground down the top gear to gain play. This did help but didn't solve the problem. I also took some material off the shaft where the idler gear rides. This also helped. What solved the problem was grinding some off the single speed case where the idler gear is.
The lower shaft was ok and even able to use the little shim/washer.

Here is a few pictures.

Thank you,
Promod