Good luck! Hope it's a mild case, nobody else gets it, and you get over it soon. Just be sure you do!
On the parts problem (the Bronco's, not yours!) in that pic #1 of Post #5, the locking assembly is most definitely NOT installed all the way. The silver machined ring around it must sit below the surface of the bearing hub far enough that the large locking ring can fit into the slot in the hub. Yours is still half an inch at least shy of that depth.
So this could be that you have two issues. The initial one is that you have to make sure that your bearing hub has splines that are cut deep enough for the lockout mechanism to fit.
This issue with the hub splines not being machined deep enough is a known problem for a couple of years now. Is that hub from us? Or just the spindle? We were supposed to be checking the fit of every hub with a depth checker (a Warn lockout most likely) to be sure we don't fall into that pit again.
Apparently stock factory Dana/Spicer lockouts fit still, but the manufacturers of hubs are getting cheap and saving a few pennies by casting in less material and machining shorter splines. Good for them, over millions of units, but bad for us end-users.
The second issue should not be too bad. That's the slight misalignment of the two spline shafts trying to coordinate during the install. As the others have said, a little spinning, a little lifting and a little tapping should do the trick. But you still have to get that metal ring with the six threaded holes down beyond the big ring groove in the hub.
While you have it apart however, another common issue is sloppy machining and handling of the hubs, where there might be a tiny burr or deformity on the splines, or even shipping damage where the hub is no longer perfectly round.
These are easy enough to check, but you have to do your diligent inspection of the splined area to make sure it's free of any of those defects.
Good luck.
Paul
