Appreciate the input; I was begining to doubt myself somewhat. The engine builder also told my brother in law that his wife's VW did the same thing due to she rode the clutch all time. I can see how that would wear out the clutch faster but not cause the engine to lock-up due to excessive pressure on the rear
oil seal and bearing. Unless like Mbechmann mentioned inadequate
oil supply internally. From the research I found if one tightens the flywheel to tight or forgets the washers or shims between the end of the crank and flywheel there is potential for the motor to lock up.
Thanks A bunch, I was feeling like I created this problem for my brother in law since he enlisted my help to restore it.
Dawger-