[ATTACH=CONFIG]529666[/ATTACH]this is the crank. All other rods have clearance. #2 rod looks ok & so does the bottom of #1, until I start to torque the #1 cap. Then the clearance goes away. If the journal was polished wrong could it force the rods together?

This is a common cause of side clearance problems. Can you take the caps off and post a close up photo of the journal with the 2 rods in place so we can see where the bearings are in relation to the edges of the journal?

Just putting this out there not trying to insult anyone but are you sure u don't have the rods in backwards? I ask because I've seen it done before.

Using the good old google search with your part number shows you have a RPM forged crank. They list .125" radius on the crank. You should be using P bearings, not H bearings.
[ATTACH=CONFIG]529668[/ATTACH]

I was just going to bring this up, the wider bearing will kill all the side clearance and eat them selves up quick...

Well, this would explain why the crank is hard to turn over by hand. I would triple check everything with this bottom end build up. Make sure you research all the little things like correct rings for the application, ring end gap, piston / cyl wall clearance, rod bolt stretch (or torque), etc. There are a LOT of little gotchas, especially with a marine build, that can bite you in the azz and reduce this new build to scrap in a heartbeat if you are not careful. I built the bottom end on my engine, and I literally spent weeks researching all of these things, not only here on OSO, but also with tech support from the manufacturers. In the end, it took three times as long to put together, and I nearly drove half of the OSO crew insane building it, but I feel pretty good that it was done right and will hold together. (Looking for a big piece of something wooden, other than my head, to knock on here.)

Well Black Baja had it almost right, I somehow got the upper & lower bearings swapped on #1. I swapped them & reassembled and now have .016 clearance. Now that I have proper clearances on the sides I checked bearing clearance on the rods. I came up with .0015 to .002 across all 8 rods. Plastgage is all I have for this measurement so the actual clearance is closer to. 0017, not quite wide enough for .0015 but too wide for .002. The book says that this is within spec but on the tight side. What are your thoughts. I have stopped here for now.

How's the blood pressure Randy, time for a cocktail yet,

The healthometer in my phone says that I will live through this. Lol

You got this, just think how much your learning, I'm getting ready to open up a couple Gen 6 502's and redo them, converting from carb to EFI, good winter project