I just serviced my 704z (drilled drain holes in the rotor cup and packed it w grease) and after reassembly, I noticed that the bottom of the spool slightly rubs against the rotor cup when the shaft drops to the lowest position.

It's not bad but I'm sure it will drive me nuts, especially since I finally muffled the clicking.

Could this be corrected by adding another teflon washer to the shaft?

It could be a worn bearing like on my real.

Not alot of clearance there if U give the cup a shot like fall on it or something.U get that no trouble really.try sanding the cup with some emery cloth If it bothers U that much.