So, I have a little more info...
I removed the rear takedown pin and held the upper and lower together while I pulled back on the bolt. The bolt will go all the way back and lock like this but it has to push the upper and lower a little appart which causes the rear takedown pin hole to be sightly misaligned.
My new theory is that the bottom of the bolt is hitting inside of the tube and is binding up.
What are my options to remedy this? Is it an equipment problem or a me problem?