Originally Posted by tgscordv6
Is there a 2-5mm gap between the fork and the top of the stem?
when you've 'overtightened' it and it almost goes away, cinch down the stem (which is what really holds the adjustment, not the top cap) and then completely remove the top cap.
where is the top of the steerer tube in relation to the top edge of the stem. pretty close i'm betting. does the top cap have a step down that drops into the top of the stem 1mm or so? i predict you discover that the steerer is bottoming out on the underside of the top cap, which prevents the preload adjustment from acting on the bearings (ie: you're preloading the steerer).
if so, take 1/8" off the steerer, or add another spacer (on top of the stem is OK if you don't want to change stem position).