Luckily it didn't cross-thread and break off as you mentioned... that broken end and screw would have been captured in the bottom of that outer fork tube for eternity!!!
What you see is all stock parts, the valves have not arrived yet. The spacer piece you mention is, in fact, item 16 oil stopper in the figure (maybe Gen I is different?). I'm pretty certain the taper on the outside of the stopper performs the cushion effect at the collapsed end of fork travel, progressively limiting the flow of the captured oil squeezing out of the void between the inner tube end and outer tube "end cup". In effect, a hydraulic cushion to avoid a clunk when bottoming out.
The only theory I have been able to come up with is that installing the spacer (#16) after the inner fork tube was installed caused the lip of the inner tube to get sandwiched between the space and the outer fork tube seat, causing a small gap there and also where the valve extension seats in the small counterbore in the outer tube. The screw was trying to stretch the valve down into the gap, and SNAP!
I fear those oil stoppers (#16) need to be installed in the outer tubes before assembling the inner tubes into the outers. If so, I will need to tear the tubes apart again, possibly damaging bushings and seals in the process. But hey, that's only a little more time and money right? I was just hoping to get confirmation from someone before I go through the extra work. Tonight I plan to test whether the stopper fits through the lower end of the inner tube. If so, total fork assembly should not be needed (crossing fingers!).
Luckily, its so hot and rainy in FL right now, its sort of my "off-season" with commuting to work.
Thanks again for your interest in my dilemma.
