OK, fixed. First a big thank you to Bruce Wentworth, he really understands customer service and actually took the time to phone me when I asked him a question. An e-mail would have worked but what a pleasant surprise for someone to take that kind of time for a $25 part.
Also, a bigger thanks to Ami-Man for guiding me in the right direction.
So here's what I found. The sprag gear wasn't in horrible condition but it also was not in proper alignment. I replaced it to be on the safe side. I also found that the gripper bow was not properly aligned and I suspect that the optical sensor was not properly adjusted.
In order to do this job right, you have to follow a sequence. The manual does not walk you through that and while it does tell you the "how to" for each operation, you have to kind of learn as you go in order to make this job a success.
Step 1 Remove the entire unit from the jukebox. Lot easier to see everything, especially for an amateur.
Step 2 Detach the computer from the right side (not necessary to disconnect entirely , just carefully lie it on it's side) - 2 screws right on top by the red lights.
Step 3 Unplug the two sets of wires from the sprag unit assembly, remove the 3 screws, and remove from the unit.
Step 4 Remove the c clip, slide out the old sprag, slide in the new sprag, slide on the c clip.
Note, Bruce puts the 4 bushing into the assembly as part of his kit.
Step 5 ADJUST THE SOLENOID. Very important step. I found mine to be at almost .040". Kinda tricky but only keep your finger on the roll pin, not the entire mechanism.
Step 6 Reinstall the sprag unit assembly AND ADJUST THE BOW POSITION. Another important step as you have disturbed it's alignment. See the manual on how to do this but it is EASY. I used the cam lever to engage the bow and did this while outside the jukebox.
Step 7 Reinstall the unit back into the jukebox.
Step 8 Take the time to readjust the optical sensor. EASY EASY EASY.
Thanks to everyone for their help, I was able to perform a full index and I no longer have discs stacking up on top of the CD Pro player.
Greg