Thats because the wd40 has washed all the old muck out......and the grease.!
Wd40 is not a lubricant.....
If you take the freehub off with a 10mm allen key, you can slip the seal out the back and at least put some oil or chain lube in there to replace it.
Really, i would crack the freehub, clean it out, re build it and re grease it. You can use an old socket cut up if you cant find the castilated tool on line.
This thread has a picture and a link to a chinesium ebay version of the now defunct shimano tool.
Does anyone here know where I can get the equivalent of the discontinued Shimano TL-FK40 for disassembling freehubs? There's an American chap who makes them but only ships within the US. It looks like a Polish company called Bitul used to make them, but no longer does.
Should try some grease lube rather than oil, though medium oil is a good old turn of the 90s trick for less resistance and more speeeed in shimano freehubs. Well until it seized as you never bother to top the oil up...
SRAM isnt a 'step up' btw - its more of a sideways slip n slide, theres good and bad in both
It sounds like (and I cant be bothered to read through everything) you need a small spacer behind the cassette. Some hubs have a small lip that can rub against certain models of cassette
Depends if it’s a step up from what series,
I think a lightweight sram cassette and an XO rear derailleur is a step up from a hyperglide cassette that weighs two times more and a lx rear derailleur. I do have a spacer, but it is nothing to do with it, the freewheel feels stodgy on its own, it is not the cassettes fault.