I'll be honest, Frank, and admit I don't not 100% sure what you are driving at. I think I get it, but I'm not sure, so let me take a stab at it.
At one point I had a problem with the original handle I was working on. There were, in fact, a few problems with the original handle. The first was that I had drilled out the center slot incorrectly, which caused the upward tilt that was observed. This was caused by the fact that I have a very small drill press and have to make a lot of compromises to the way I drill holes through handle blocks lengthwise. Another problem along the same line is that I did not leave enough spare wood at the top edge of that slot to address the orientation problem.
The third problem with the handle was that while I was trying to get a nice flat join between the handle and the guard using the sander, I kept screwing it up... a little too much of the left... then overcompensate on the right... now centered, but too much contact at the top... then overcompensate and too much off the bottom. Get that centered and now it's off on the left again. Eventually I had removed too much wood and the handle no longer would have worked without spacers, and I didn't want spacers.
If I read Frank's post correctly, I should have shown those problems and shown how I corrected them in the second handle block.
Honestly, I didn't take pictures at that time because I was frustrated and angry. I do still have the mangled handle piece and could show some of those problems, but the rest would only have been visible if I could take pictures holding the pieces up against a backlight.
On the second handle block the things I did differently were to make the slot smaller and leave more space on all sides. It was this "more space" situation that I spent so much time addressing yesterday. The way I addressed it this time was to leave the power sander alone and just take some 120 grit HF sanding cloth, lay it flat on my workbench and rub the piece on it in various ways to get the right angle on the front of the handle block, and to evenly remove material around the sides in a way that kept the piece flush with the side of the guard.
So again, I'm not sure this addresses the issues you raise... hope it does... but if not, I'm open to more comments.
As an aside, I had another mild crisis last night. Before attaching the handle I used JB Weld to attach the guard to the blade. My thought in doing so was that the JB weld would form a nice seal around the tang so the AcraGlas I use on the handle would stay in place. Apparently I missed a small spot in one of the corners. 2.5 hours after I had poured AcraGlas down the tang from the back, I found it had leaked onto the blade, covering a space about 3 inches long. It was partially set, firming up but not hard. I tried scraping it off with my nails, so as not to scar the etching, but that was no good... so I went to the garage and used some Acetone on a paper towel and that did the trick beautifully.
This morning I decided to finish the assembly using KB Weld to attach the pommel. It's drying now.