Chaffin book says set the lash, the set the side play by installing the bearing, bronze washer and steel washer, then the other housing. You should be able to spin the ring gear with a bit of resistance.
So I did all this. I had a washer that measured .206. Installed it, put the housing on, spun, felt resistance, good.
Pulled the housing, got out my tube of copper infused permatex (per Stan Howe instructions), bolted it together. You have probably figured out the step I missed already - tightening down the bolts on the housing during the test. I bolted this together and the whole assembly was locked hard. Would not budge. Now I had a mess of partially dried sealer. So I just walked away for a day or so.
Once the permatex had dried, I pulled it all apart, then got to scrape and clean. Finally got all the orange scraps cleaned up. Put it together, BOLTED IT TIGHT, and locked. Pulled it apart.
I had another bronze washer that measured .186. Replaced it, BOLTED IT TIGHT, and now spins with a good bit of resistance. Took it apart again. Permatex again. Reassembled a last time, with bearing grease again on the bearing, bolted it tight.
Waited a day for all the squish-out to dry. Got a razor blade and trimmed it up.