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I was able to diagnose the problem by using tool orientation to check if Z was perpendicular to the part face. Turns out the stock face (which was used to define Z in the setup) and the part are off by 0.01646686 degrees. That will mess things up.

 

I've attached a new version of the design for you to try where I used a face on the part for the Z direction. Seems to work fine.