I found the gear cases are a little warped, but seemed to go together and seal reasonably well with all the screws in. Make sure your trans bearings are fully seated and there is no flashing, that will help.

I believe the binding is the flats on the sides of the gears crashing into the teeth of the opposing gear. I suspect that a slight bevel/chamfer on that side of the opposing gear teeth would prevent it from snagging the flats.

I considered sanding them a bit to do just that... but then I figured just running it will clearance it better.