Ian,
Thanks for that. I pulled the gasket out, had the thrust washer thinned down by 0.020" to 0.073" and did another trial assembly; suddenly the box indexes up and down much more freely, turns with no tight spots. Thats with the dogs and splines practically bone dry from all the handling, too. I may have taken a bit too much off the thrust washer, the layshaft end float is a bit clunky, may be ~0.010" to ~0.015" now. But I'm thinking thats not so bad - both bushes at the ends of the shaft have generous thrust faces with slots in them to let oil pass out, and the only constant end load is going to be from the skew gear which drives the speedo, which I'm guessing will not have much force. Perhaps I'll butcher another washer to try and get the endfloat to zilch, but I'm not sure its worth the bother.
Steve