I just came back from my engine builder friend's (Dennis) shop. He measured my upright to make sure the bearing bore was round (enough) and small enough to provide the proper fit. He thought it did so that was good news.
When I got upright, stub axle, and radius arm back from the shop down the street, I notice that the spacer was in two parts (the long part is 2.0233" and the short part is 0.126"). Since I'm using TC (not Special) rear suspension parts, the spacer I need is 2.125" long. A keen eye will note that there is no combination of those two spacer parts that adds up to 2.125" /-0.010". Dennis further examined the bearing bore for the inner bearing and it appeared that the bearing had not been seated entirely in the bore. In fact, he noted a small patch of rust on the outer race confirming that. It was apparent that the spacer I had was too tall and that was likely the source of my problem. I'll remind everyone that my bearings seem to be in good shape (other than the small patch of rust on the inner bearing). There is no roughness when turning the bearings and the seals appear to be intact. I don't know how many miles are on those bearings but they seem to have a lot of life left in them.
In my defense, I did not assemble my uprights. I believe they came from Richard's (at Banks) shop and maybe someone who was not careful put them together. Regardless, I'm pretty comfortable that Dennis' analysis is correct. Not taking anything to chance, I did some measurements to ensure that the 2.125" spacer was the correct one (it is longer than from the inside of the outer bearing to the shoulder of the bore for the inner bearing and when assembled, the entire inner bearing should be in the bore).
So I'll be ordering the rest of the parts I need and get on with putting things back together. To that end, I'd like to find some Loctite to use on my bearings. Some I've seen require a fair amount of heat to disassemble the part. Can anyone suggest a Loctite (or similar product) to help hold the bearings that does not require a lot of (any?) heat? Would regular blue Loctite work?