G'day moweasy,
This does not sound right!
Both nuts must be done up firmly and no interference when the pulleys are spun when it is at rest.
If it's not free with both nuts done up snugly then another spacer washer is required between the spring and the pulley bearing on the side that is rubbing.
You should always have at least one washer between the spring and the bearing and add additional ones for adjustment. I suspect the side that you sanded down will,only need
the one washer due to the extra clearance you created by sanding off material. If you have more than one washer on this side you might be able to steal one to put on the other side (I'm assuming it's the unsanded side that is rubbing).
If you are still short of spacer washers I can put a couple into an envelope for you.
I'll do some research on the cutter clutch for you.
Cheers,