Major Clunk Source

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This is the nut that adjusts the bearing loading. If you fiddle with this, you'll need to go through the adjustment procedure in the shop manual.

With the fork tubes loosened and pulled down out of the top clamp, it was easy to see what causes the clunk. There are two sources of freeplay in the assembly. First is the bearing adjustment nut on the threads of the steerer. There is at least .02" of lateral freeplay between the nut and the steerer.

AHHHH, this make sense. When the top nut is overtightened, it crams the bearing adjustment nut threads more tightly against one-another which doesn't allow the nut to move around on the threads. There must be a better answer.

Please excuse the bad photography.