Livinlawatertown, If you feel that I am dragging this too far off topic for you, please let me know and I will spin it off into another thread.
Does the bolt carrier slide freely on it's own (no pressure from the buffer spring)?
Is the firing pin retaining pin properly installed so that it's not dragging inside the upper receiver?
Try it with the charging handle and bolt removed.
One possibility is that when the upper was built, it was clamped down too tight in the receiver block and the walls of the upper were compressed a bit (that's why the better receiver blocks have an insert for the upper so that doesn't happen).
The BCG does slide freely with the upper off the lower, also without the charging handle, and with a completely different bolt carrier. The firing pin retaining pin does not drag in the upper as well....
Since we're getting into this we might as well get the entire picture set correctly....
The gun is a mid 80's production Large-hole Colt AR15 Sporter II with the original large-hole A1 upper, no forward assist, 20" barrel, and an A1 stock with original buffer and spring. In this configuration it functions fine, no issues.
A while back I picked up a complete small hole 16" Hbar A3 upper w/ B BCG and charging handle along with a 4 position stock with buffer and spring and an offset pivot pin at a Springfield show. All parts were NIB.
After installing the collapsible stock and 16in upper, it would more often than not have the bolt hang up half way through it's return travel to chamber a round after firing. This occurs with or without a magazine inserted into the rifle. This occurs regardless of the amount of lube (oil) on the receiver and BCG. This also occurs with the original A1 stock and buffer/spring installed. This also occurs with the BCG from the 20" upper installed. I took advantage of one of my buddies and borrowed his BCG from his Bushmaster, while I was not able to do an extended test, from the 30 rounds it fired properly I would say it functions properly, usually the most trouble free round count I'll get is 5 or less....
With the collapsible stock installed and the 20" upper installed the bolt would still hang in the same manner, but at a reduced frequency. reinstalling the original stock corrects the issue when using the 20" upper.
So, I can hazard a guess that something about the buffer extension tube and/or the spring for the collapsible stock is causing an issue, but I'm at a loss as to whats wrong with the 16" upper as the problem occurs in both stock configurations. The only thing I haven't done is put the upper on another lower, as it is a pre-ban configuration, and everyone else I know has post-ban rifles.