Rear wheel locking when torqed

I am in the process of restoring a XJ750 Maxim. Yesterday I was replacing the wheel bearings and installed the rear wheel. My Haynes manual for the XJ750 says to torque the rear wheel axle nut to 77.4 Ft. pounds. The wheel locks up tight as a drum.
I have checked the rear wheel illustration in the Haynes manual to check and make sure that I left nothing out. I replaced all the bearings and seals with those that I got from Chacal. They are identical as the ones I took out.
The strange thing is that when I eyeball the bike from the rear, the wheel seems to be offset to the left almost 1/4". I have double checked and everything is in place according to the Haynes manual. I also looked at the illustrations on the Yamaha parts fiche.
I replaced the rear shoes also and they appear to be plenty loose.

 

Ed,

Are you sure you:

1- have the rim seated all the way onto the gear on the final drive
2-have installed the spacer that goes inside the rear? If that is not in there the whoe thing will tighten down way too much and cause it to bind

I have not received my shims back yet, either. Could you PLEASE return them? I need to get a bike finished up for the owner.

Thanks,

Dave Fox