SX3 pulley rubbing?

[Cardnim]

I've completely broken down my SX3 into the tiniest pieces it will go to in order to completely rebuild for the oOple race.

...and wouldnt you know, like a plonker Im already stuck on Step 2 in the instructions!

Can anyone offer any help as to what Im doing wrong?

Here's the problem:
In the instruction manual it shows just sliding on the bearing and then placing the whole layshaft into the metal housing...


Then, I complete the Steps and place on all the pulleys, the slipper, spur, housing etc and then screw on the steel idlers with the lock nuts.

But now this pulley (the one in the pic above) fouls on the metal housing and drags.

I can see it has actually been happening to the car previously, as the black paint on the housing metal has been scoured off.

Here's where it is happening:


What am I doing wrong?

It feels like in the instruction manual in Step 2B (see pic above) that there should be a little washer/spacer between the pulley and the bearing just to space it out, but there isnt.

Is this a known problem? I've heard about people putting spacers on this layshaft, but thought that was just before the lock nut went on to eliminate the "click".

Any thoughts?