I'd probably try new batteries. Those 1600 stick packs might be old Nicds. If your motor is really fresh you might try heating it with a hair dryer or heat gun to loosen it up a bit before starting it.
Also try to let the wheel spin up to speed on the starter box before hitting the flywheel. If it's shimmed up too high the flywheel might make contact before it starts spinning as you suggested. Pick up the front end of the buggy while pushing the rear down to start the motors spinning, then drop it to let the flywheel contact.