Darkseid-
I agree the main problem with your pulleys now is probably because the fences are messed up. As far as wearing thru the pulleys with the pin thing, get some set screws (2mm x 6 for the 17 tooth and 4mm x 6 for the 20 tooth) and run them into the plastic until they bottom out.
The fences go on with the rounded smmoth edge facing inward. If you put them on correctly the first time no glue is needed. even with glue if the fences are installed backwards there isn't enough surface contact to work properly.
Personnally I have never had or heard of this problem from anyone except you, not saying you are the only one to ever have the problem.
IMHO- you cannot blame Schumacher for your own mistakes, if you forget to put motor oil in the engine on a brand new mower you assemble is it the manufacturers fault???
As far as wearing thru the pulleys with the pin thing, get some set screws (2mm x 6 for the 17 tooth and 4mm x 6 for the 20 tooth) and run them into the plastic until they bottom out. This is schuamcher's fault because they used the holes to lighten the pulley this making it weaker.