Update: still not fixed!

Something is definitely wrong as my road bike (Ultegra) does not exhibit this behavior. I have backed out the pulley screws (previously quick cleaned them) to make sure they weren't overtightened to no avail. The spring seems to operate correctly as far as I can tell. Im starting to wonder about the derailleur though. I double checked the big big length method of the chain and so what else could it be?

I am starting to get like another poster on BF: simply swapping chains should be a 10 min job, which for me takes well now hours/days and still not resolved! To think, I used to rebuild engines but now I simply don't have the patience/time.