x2 on packing a bearing. 'nuff said.
The inner nut sets the preload on the bearings, the outer nut is a locknut (just keeps the inner one in place, should it want to move due to vibration) and should be finger tight. You should have about three tubes of CV axle grease (if that's what you're using) in the spindle. You can't tell if a tapered roller bearing is moving properly, unless you observe it under load, which you can't, in this case. The rolling preload, using the fish scale, is applicable only for new components. If you've replaced every component during the service, and your inner joint components looked good (no observable race or ball wear), you should be able to spin the rotor easily by hand (it won't freewheel, but it should turn). There are quite a few components contributing to rotating drag friction.
The reason the FSM says to tighten, turn and repeat is 1) to ensure the bearings are seated, 2) to progressively compress (load) the bearings, and 3) to account for the difference between static and rolling friction. As you noticed while you tightened the nut the second and third time, the torque was initially higher than when the nut started turning. This is because the coefficient of static friction is higher than that of dynamic (rotating) friction. The variable torque limits in the procedure account for this. (FYI, new procedures do not follow this method; it's just to hard to describe to someone who hasn't done it before. They use the "turn of the nut" method to ensure proper preload by stretching the threaded bolt/stud/arbor.)
You need to concern yourself with the bearing preload during installation. If that's correct, and you have enough grease in there, all will be well.
It sounds as though you have a lubrication problem. I do not ever reuse seals, they're too fragile.
