What did I do wrong?

I don't know. That seems like it would be mighty close to the carrier. Are those contact marks I see on it in the first picture? The dotted lines?
No.

It would not turn basically and after attempting re-adjusting backlash I could see some half semi-circles where it dragged. I did not take pics of that.

Close is my concern. I am going to pull a .020 shim and replace with an .010 shim and re-pattern because of this concern. Will post up the change Tomorrow night. That will put me at .074 total.