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The spring goes like you have it laid out in these pictures. Big end first goes in the equalizer ring, insert spindle, and push small end of spring up onto shoulder of spindle as in picture I previously posted. THEN care must be taken to insert spindle into rope pulley without without the spring jumping off the shoulder. It will work when correctly assembled, believe it.
The friction of the spring around the shoulder of the spindle makes the equalizer ring want to stand still as you start to pull the rope. That makes the 3 little pawl springs pull out the pawls as they run out ahead of the stationary equalizer ring.
Very simple device that flabbergasts everybody.