Well I got my frame sorted out. Took it to Rob Roberson and he reamed the seat tube, now the post slides quite easily.
He said the problem was probably distortion from welding.
Also found a solution to the brake reach problem.
Saw some SRAM Red brakes on EBay that were described as 10 speed.
I got them because they are silver which will match my bike and SRAM does not make silver anymore.
They arrived yesterday and are like new and very nice. I was expecting the front brake to pads to not reach low enough but they easily had enough adjustment range. Seems these brakes have a longer reach than 49mm.
Also the rear brake is spaced further from the frame so I no longer have the problem with the pad holders hitting the stays.
So it was a win - win. Now I can finally get on with finishing the build.