First, make sure you didn't leave anything out, like a small thin washer. I suggest you disassemble it and see if there is something in the gearcase that doesn't belong. Wash the parts thoroughly looking for foreign matter. Reassemble checking to see if things go together freely and see how it turns.I mentioned a thin washer at the beginning and that's likely to be your trouble. It may have been installed in the wrong position. This is just a clue. When you put the end cover on check to see if it turns free as you take up on the screws. I'm betting that at that point you will have a feel for it and be successful. And be sure to use the correct gearcase lube.
When the compressor at work allow the water to get in the lines the solution is to replace the filters in the dryer as they are blocked and the air bypasses them to get to the system. Check to see if that is the same problem