Front wheel and brakes

I recently took off the forks from the PO, which had the brake mounts shaved off, and I put on a new set of forks. I started assembling the whole front end, but no matter what I do it ends up with the Discs pressed hard against the brake pads to the point where the tire won't spin.

My bike is a '85 XJ700NC and here is what I did:
1)mounted discs on my 85 XJ700 fron wheel
2) lined the wheel up in the forks
3) put the rod through the passenger side...through the wheel...through the spacer on the driver side...and into the fork where it starts to screw down.
4) mounted the brake calipers on the disks and bolted them into the forks. The driver side fit on smoothly, but the passenger side was a little tight.
5) started screwing in the rod and torque-ing it down. Before the rod is any where near toqued down, the discs are solidly pressing against the brake pads on both calipers.

Any ideas?
On the XJ parts diagram of the front wheel, what are parts #11, 5 ,4 ,2 and 3? Hopefully these parts are internal, because all I have is a rod and a spacer.

 

If you have ALL the correct Parts:

Remove the Brake Pads.
Open a Bleed Nipple.
Compress the Caliper Piston Fully into the Caliper(s).
Close Bleeders.
Mount the Wheel and Both Calipers.
Install the Pads last.

Once you have the Pads in with the Caliper Pistons collapsed; the Wheel should rotate without the Caliper Binding.

(If the Calipers have never been serviced ... It is possible that there is an accumulation of Foreign Matter and Brake Fluid which has congealed in the Caliper Seal Channel causing the Caliper Piston to Bind and NOT retract upon the releasing of Hydraulic Pressure from the Master Cylinder).

 

You transferred your original rotors to the "new" wheel?

Parts #2, 3, 4(x2) and 5 are internal; #11 probably stayed stuck in the wheel and you didn't realize you could just pull it out.

Maybe that's the problem? If you swapped wheels did you pull the #11 out of the original wheel and plug it into the other one?

 

Rick has it ( as usual).

wheel/calipers first then pad...if i may offer a suggestion?
run a small dia piece of clear hose from the bleed nipple
into a can or pan so no brake fluid gets on any surfaces you
dont want stripped of paint. brake fluid makes a great paint
stripper and will eat the paint off the wheels like now.