onespeedbiker, I completely agree. A colleague and I have pretty much come to the same conclusion as you and have deduced that it's the cups themselves and not the bb shell. We are going to check some various other 68mm cups tomorrow and see if the fit is the same.

If it is just the cups then that's great! But my next question would be whether to

A. stick with this bottom bracket and use Loctite (already tried teflon with no success)

or

B. get a new bb and crankset (miche propitiatory sizing greatly limits bb selection).

I'm unsure about the loctite as I would hate the possibility of it seizing and ruining the threads later on during service.

Can anyone recommend a 68mm x 107mm English threaded iso taper bb? I have yet to find one.