Type 4 Engine Case, Crank & cam won't turn with new bearings Options

[914sgofast2]

We are rebuilding the 1.7 engine in my son's 914. Crank and cam have standard size bearings journals. Bought new standard size main and cam bearings. Installed in case halves and crank would not turn. Opened case and discovered one of main bearings had slipped and was off the dowel. Placed back on dowel and put case halves back together. Crank still would not turn. Took cam out, rechecked main bearings were all centered on their dowels and reinstalled just the crank. Crank still would not turn. WTF? Took crank out and just put cam by itself in case with its new bearings, and put case halves back together. Cam would not turn!
Son took case and crank to machine shop that had re-bushed the connecting rods. They said crank was ok and had standard bearing journals; but that case halves had worn bearing saddles that were too big and the case needs to be align bored. Does not sound logical to me. If the bearing saddles were too big, then why would they cause standard size bearings to be so tight that neither the crank or cam will turn? Could the case simply be tweaked? Any ideas?
Anyone know of a machine shop in the Sacramento, California area that knows their way around the Type 4 engines? The shop who did the connecting rods does not know VW or Porsche engines.