I doubt is is because of an 1/8" chain on a 3/32" cog. All that will do is wear out the cog faster. More likely it is due some combination of the following: the chainwheel and/or cog aren't completely round (due to wear or poor manufacturing standards); the chainwheel is bent or isn't centered on the crankarm; the crankarm is bent or isn't seated well on the BB spindle.