Colin, take a real close look at the bearing that holds the spur gear. On a 12L4 diff it is flanged, and the flange must be on the left of the spur gear (looking from the back of the car)
If you get that the wrong way round, so the bearing that holds the spur gear has its flange on the right, then when you tighten the diff, all the bearings crash into one another before the D rings clamp the diff balls. On some diffs, you still get drive, but the diff action is awful.
I suggest this because you say you built the diff from new - so did I, but of course I wouldn't have made this mistake, so this is just a wild guess!!