Well one firm rule that seems to be the norm for CB's is string tight to rail, yes it causes serving wear and may slow the CB down. Why? I am not sure of totally why of all the reasons but one is the string jumping over the arrow onthe rail. That is one reason why the diameter is critical on the CB. You said it was originally about one1/8 over rail and you shimmed it down, I would say you went in the right direction. Sorry there is not anyone in this forum that is wise to your CB and can be of a firm help. But all the CB's that we see are firm to rail, and made that way. I think Bear archery made a CB that had a large gap and used a full nock set up on its arrows with a fork style rest, not sure if this is the design you may have since it had a 1/8' gap.