I'm having trouble getting my headset to stay adjusted. It either binds, or is too loose. When I finally get it okay, it seems to loosen on its own after a few days.

I've checked that the bearing cages are correctly aligned, and I think they are.

One thing that isn't obvious to me is the stacking order. I thought I would remember how it was assembled, but perhaps I've got it wrong. The headset is a bit strange in that it has two treaded lock nuts and a keyed washer slash hanger. I can't see what different it would make, but should the washer go between the adjustable race and the first locknut, or between the two lock nuts?

Right now I have it going in this order:
adjustable race, keyed washer, first lock nut, second nut. I've tried it the other way (adjustable, lock not, washer, nut).

Both ways seem to loosen.

One of the nuts is round with notches rather than flat faced; I've found no tool to wrench this, so I've been chewing it up with a pair of channel locks (grrr...)

See pic: