hattitude, that is exactly what I just finished doing. Took the wheel off, cleaned everything, and applied anti-seize to the axle, and backside of the cone nut, as per the manual. Every part was exactly where it was supposed to be, in the position it was supposed to be.. Rechecked all three bearings, 2 in the wheel, 1 in the drive hub. All 3 check out good. Put it back together the same way I've done it the last 14 years. I could not find a single thing that was wrong, or out of shape, or position.. But whatever it as, I couldn't find it, so imagine my surprise that when I put it all back together, I got the proper torque on the cone nut, and the wheel still turns by hand. Obviously, I must have done something wrong, but damned if I know what.
Was the spacer snug against the bearing bores? If there was too much clearance between them , when you tightened you moved the inner race way off center and seized.