I got some pictures, I didn't grab a video because I feel that the pictures are adequate. There is very clearly a problem. Please note that the bicycle is upside down in these pictures as it is mounted into my work stand.

First off, look how much slack in the chain there is with no interaction with the bicycle on my part.


It seems to me that the upper pulley isn't far enough around its pivot point to make contact with the chain.


Here is a, perhaps clearer, picture of of just the RD/wheel.
Upper pulley on the left of course, lower on the right.