So, I took apart my fork yesterday, to see if there would be any opportunity to "tighten things up" and remove the slack. Wow, what I found was interesting. First of all, my fork internals don't exactly match the diagram in post 10. I only have one spring above the lower fork shaft (pic attached) and I have two holes in the upper tube, but only one has the 2 hex bolts that hold the two half moon pieces in the tube that press against the lower shaft's flat part to prevent rotation. Much to my delight however, there are also two tiny set screws next to these to increase pressure of the half moon alignment pieces against the lower shaft (pic attached)!
But alas, I found some things that made me sad ...
1. There was zero play in the lower shaft. I know this as I attached a small breaker bar to the upper tube and got zero play, it was quite firm. So no opportunity to tighten things up.
2. My upper bearing holder ( the ring of metal that has tabs that hold the bearing balls in place) was destroyed, and a whole bunch of metal pieces came out of the headtube when I removed it. Luckily, I was able to find and keep 21 of the 22 bearing balls.
3. I was missing (if the DiaTech ABN & SBN diagram in post 9 is right) the #7 and #12 seals!
4. The adjusting clamp would not work. Essentially, the #3 adjusting clamp that squeezes against the #4 centering ring had an upper diameter of 1.145in. and the diameter of the tube was 1.125in. So that only allowed 0.020in. of tightening, which didn't raise the adjusting clamp much, if anything. The casting and surfaces of the adjusting clamp looked pretty crudely done, which may account for this diameter issue. I reamed the adjusting clamp top out to about 1.195in., and it worked much better.
So, with uncanny skill, I cleaned up the fork parts and greased the sliding contact surfaces, and reassembled the fork. I got around the upper bearing issue buy putting the balls in a thick grease, and sticking them to the insides of the #9 frame cup, then was really careful not to dislodge them upon reassembly.
Took it for a 14 mile test ride with a lot of bumps, and while the fork did become a little loose, I was able to tighten the adjusting clamp again, and that took care of it, and after this morning's ride on the same route, it held up just fine.
But I'm kinda screwed, as I couldn't find a source for the DiaTech headset online, so I dunno where I'm going to get the seals, and bearing, for that matter.
And as far as I can tell, there is no other way to fix this as without a star nut in the upper tube, you can't use anything but the DiaTech! And you can't put a star nut in the upper tube because there's no room because it's full of spring and stuff.
Which leads me to summarize, that if the upper bearings go bad like mine did ( and probably for every bike built, eventually they all will, nothing lasts forever) unless you opt for a different fork, a very unique fork with the right 135mm wide opening and the tabs for attaching the BB tube, and mounts for disc breaks, etc., then the bike becomes a dust collector.
I sent an email to Cruzbike yesterday inquiring about the replacement fork, and called and left a message about the bearing, I hope I get a response!