Its very strange, the gear box seems to spin fine, there seems to be nothing wrong with the back wheel hrmm.
i did spin the back wheel and noticed the sprocket wasn't perfectly inline straight, its pretty straight tho. Just a tiny bit of a wobble, but when i'm peddling I don't notice much drag at all, nothing more than the weight of the chain on the back wheel. I installed the rear sprocket with one rubber disk when following instructions on a video, could that be causing the problem?.
I'm really at a loss, this problem doesn't even seem possible. Next step is to buy a new gear box and sprocket to see if that maybe causing the problem.
here is how i installed my sprocket.
is this the cause of my problem? http://www.youtube.com/user/grabir01#p/u/16/A-BOqnl-CX8