I suspect the timing bush bore has not been machined / reamed at 90 degrees to the mounting surface (bore) of the bearing in drive side housing.
This has to be very accurate. There is something like 10" distance between the drive side bearing, and the timing bush. and the timing bush is being machined to 0.0015"clearance, so if the roller bearing - timing bush bore are not at exactly 90 degrees to each other, I would expect the crankshaft not to turn freely.
If the machine shop seem confused, or want to debate this, or want to attack the timing bush with a reamer, take the job to someone else.
Do not use the press!
Richard