Seems like it's the starter AGAIN!

After inspecting the flywheel area as per Dave's suggestion, I found that the
start gear was engaged to the teeth of the flywheel. I'd stay away from the
MSD and B&M High Torque starters. There must be a design flaw (yes, I do
have a heat shield and thermal material around the starter housing).

20150722_135800.jpg

It was tough to retract which is not normal because the clearance was set
correctly.

After disengaging the starter, I was able to rotate the engine via the balancer
bolt and long torque wrench. Just be sure, I put the transmission into 1st gear
and rotated the motor from the balancer while watching the tires rotate.

The oil is drained and looks pretty much brand new (about 10 hours, 500KMs
of use). With a magnet through the oil stream and oil filter, there was nothing
odd to be found. That's a relief as the clutch stop was installed very early in
the build process!

magnet.jpg