the whole mechanism is very simple, it's beautiful in it's simplicity, but i can't tell what exactly is broken

here, here's a brief video of the problem
http://youtu.be/0IXA_UfdmQE

if i understand it correctly the black plastic indexing "ratchet" isn't supposed to be spinning freely like that when you hold the thumb lever in a "sweet spot"? so when you add the spring + cable it always upshifts to the smallest cog..