endplay problem

Hi guys, I need some help.

1973 standard Beatle 1600 dual port

My son and I are having a very frustrating time with his bug. We took the
engine out to replace the main seal because it was leaking. We had a very
difficult time removing the flywheel. Whale trying to get that nut off we
ruined the crank pulley, because we were trying to keep the crank from
turning as we worked on the gland nut. We couldn't get the pully off ether.
We had to cut it off. We purchased another pulley and an impact wrench. The
wrench took that nut off licitly split. Now we are trying to fix a major
endplay problem.

We have installed the new pulley (though it wont seat completely flush with
the crank shaft, possibly a source of the problem) It is on so tight I think
we would ruin this new pulley if we tried to pull it off.

When we go to the flywheel and check the end play, we get a reading of .067.
That is a lot of slop!. It takes 5 spacers to make up that difference When
we install the spacers and seals, then put the flywheel back on, the crank
will turn only a couple of degrees. Something is jamming the crank from
turning ether clockwise or counterclockwise.

this engine ran before we tried to get to that main seal. Now it wont even
turn.(though if the flywheel is removed the crank turns normaly) The spacers
that were in there before were three and added up to .025.

What is happening and how do we get this thing back together properly?

Thanks for your help.

Robert