Hi Jonathan!
I'm sorry you're having trouble with your headset; these things can surely be frustrating, but I think we can get you started on track to resolving your problem. Looking at the photos of the headset, steerer, and stem in your beautiful Nomad, I have some observations...
1) The gap between the steerer and top of the spacer looks good to me.
2) The star-fangled nut looks a little high in the steerer. Did you set it to standard depth? It should be right around 15mm, according to the Park Tools site.
3) I suspect your stiffness problem is due to either...
a) the upper split centering cone being inverted or askew
...or...
b) the star-fangled nut isn't quite straight, causing binding.
...or...more likely...
c) the lower cup seal being dislodged and caught between the crown race and the cup/bearing. <== This is a known problem on an otherwise stellar headset, and the lower seal has been known to come loose even on a properly adjusted, fully installed headset. It doesn't take much for it to become dislodged and the symptoms are just as you describe.
...there is one last thing I see that could be a problem...
d) Are you doing the adjustment with the cable hanger loose *and* no tension on the brake cable? With a threadless headset, your clamp-type cable hanger will actually set and retain the tension before the stem and top-cap can do their job _if_ it is already tight.
Make sure everything is loose first, then set the tension with the top cap, and *either* clamp the stem in place first *or* clamp the cable hanger first. Then go back and tighten the other. The key is, there must be nothing that can affect tension on the headset bearings until they are locked in place.For reference, here is an assembly diagram, so you can check that everything is where it should be and oriented correctly. It is amazingly easy to get it wrong, so it's worth a check even if everything seemed right on assembly:
http://img87.imageshack.us/img87/5164/fsaorbitxliidiagram.jpgA related Forum thread is here:
http://www.thorncycles.co.uk/forums/index.php?topic=2414.0I hope this will help. If it doesn't, give a shout and we'll try again. By the way, it will help if you can recruit someone to hold the bike while you're dealing with the headset adjustment.
Oh! One last thing...though it is not required, FSA say waterproofness can be enhanced by a swipe of grease on the outside of the bearings where they rotate (but still inside the press-in lower seal). If you have to disassemble the works, now would be a timely juncture to add that little extra protection against water and contaminants.
Best,
Dan.