The drag star thing sounds like it's not getting tension from the washers, clicker or spring as the case might be. I've got an old Trion, that I put the washers on facing wrong, and it does that, but I fish it fairly tight, so I haven't gotten to do it.
As far as the tension knob, while not impossible, it's highly unlikely that it is tightening from casting. It is probably feeling tighter from fluid lock, and adding grease probably made the problem worse. Clean everything out, make sure all parts are present and assembled properly per schematic. If the threads are indeed sloppy enough to back out, add a little blue loctite to the knob, and let it dry completely before assembling.