Well I got the brake working again.
As suggested, it was a misalignment between the brake shoe holder/cover, and the wheel. Turns out that is a super sensitive adjustment.
I figured it out by setting the brake without the cover bolted to the frame, and was easily able to get it to the point where it was just barely dragging and the brake lever would come to a hard stop halfway pulled. Then I slowly started tightening that bolt while hand spinning the wheel and in the last half turn of that bolt, the wheel started binding. If I backed off the brake far enough to stop binding, it had too much travel and almost no braking force. I never thought that such a small movement, too small to even see, would have such an effect on the brake.
I worked the problem backward, started out with the wheel loose, and the brake cover bolted tight and then played with the wheel orientation, while spinning, until I got it centered in relation to the brake cover. I had to grind the axle slot in the frame longer as with my current chain it was either too short, or too long if I added one more link.
Once I got that set, I played with the engine mount to get the chain perfectly lined up again....bolted everything down tight and test drove it (in the dark) and now i'm happy. Hopefully I can get it down on a flat road tomorrow and see how fast it will go, not that it matters, the torque improvement already meets my needs.
While I had the bike hanging in my shop, I fixed another long time pet peeve. The kickstand always seemed a little long, and the footpad was a little small, making it hard to catch sometimes with my foot. So I cut it off, ground the leg a little shorter, and welded an chunk of bar stock in its place about twice the size of the old one. Much better.
Now I just have to figure out the gas cap. It's really bad, the whole top of the tank is wet after every ride.