Mcpit,
Even with your sanding... that drop off is too steep at the connection between pipes. You need thinner tubes. There is no way around this, as playability will be severely hampered from that drop off.
Im not sure if this is the correct diameter.. as Im going by sight / memory. But here you can see the tubes at a local hobby shop, that fit into each other with perfect precision. Tight enough to fit well.. yet loose enough to slide freely. I used the same kind of tubes to rebuild my ICB machine. (had to sell it)
The company seems to have a website, and Ive also seen them selling on Amazon. (not sure if its a reseller, or them directly)
With a small amount of metal polish, these babies will look like a million bucks.
The height difference is like a fingernails difference. You wont even notice it, as the ball rolls over it with quick ease. Anything greater than this... and you will certainly have ball-sticking issues... and control problems.
*edit
Also note.. that ICB's often had failure issues at the connection joints where the pipes are attached. To Eliminate this on my machine.. after I rebuilt mine, I filled the ends of the tubes with hot glue to stiffen the pipes up. I think I also glued and or affixed the tubes with glue to the brackets as well. Filling in any areas, to firm up the whole thing.