But the spacers contact the top cab and not the split centering cone...so I'm not sure what you mean by spacers pressing against the cone (I assume you mean the split compression ring that fits inside the bearing top race). It appears that the top cap has some leeway to press down on the compression ring. If I understand your suggestion correctly, wrapping the steerer underneath the cone (ring) would help it press more firmly against the inside of the upper bearing race. BTW, The bearing races for upper/lower are the same size. It doesn't seem to be an issue with the top plug "slipping" inside the steerer tube as it is tightened.

I think the bearing assemblies are oriented correctly looking at how they fit into the headtube. Any other orientation seems to be a poor fit.

I wonder if it's possible that the headtube races are poorly constructed, thereby allowing some play. I have noticed that there seems to be more than usual side to side flex in the entire handlebar/headset/fork cockpit area.

Thanks for the suggestions, they've been very helpful...keep them coming!