fc60
It's a Star Machine & a Star Head.......
I tried another Star head and it works perfectly.... 

All the heads I've seen Don't have that oil groove..... 

I took the KEY out of the Head thinking it was the problem 
 
 It wasn't. 

I understand about the Spiral cut, But, it still could need honing/lapping... 

The head slides down approx 2" above the Base, it sounds like it's hitting a ledge 
 
 
I'm not sure I understand about lapping or where to get one 
 
Funds are tight, so self repairing will have to suffice... 
 
Just tried another STAR Head>>>WON'T GO DOWN ALL THE WAY...
I miked the Column Shaft, it varies from:
TOP:: 1.188 
1.191
1.196 Middle
1.194 At the base of the Key-way