Was the piston sized to the cylinder correctly, and was your ring end gap correct? Did you ever split the cases? If so, did you make sure the trans shiftyed through all gears without binding. If the cheese doodle before you put a rod in it, is there proper clearance in the thrust bearing? It sounds like Mihylo & Smoke are heading in the right direction. It sure sounds heat related, and when it warms up, your tolerances shrink to the point of seizure. I'm still not sure if it could be motor, or transmission side. Sorry BK, but all this crap will make you a better wrench in the long run.