Appreciate all the input here. So here is my update: i put the 7/32" bearing back in and left out some grease. i folded some 100 grit sandpaper into a cone and sanded the inside of the black gasket that stuck out marginally into the axel so that it was mostly flush. i noticed that i had the lock ring on backwards so i corrected that. i put it all back together and mounted it on the frame and the wheel is now turning nicely, with just a little fall back from a gentle turn of the wheel. So the problem is apparently fixed. i suspect the problem all along was with the black gasket extending just a bit into the space of the axel, enough to cause friction and poor wheel rotation. There is a picture of this part above.