MitsuStyle - confusing/ and frustrating

I believe I posted something similar to this a while ago, but my 91 tsi seized up a few months ago, and we tried to turn the motor over by hand, and it would hit a spot and not go any farther, also we did the old manual push start, to find out that as i let the clutch pedal out it came to a violent screeching halt. So when weather permited we have been working on figuring out what is wrong, and today we got the head off to find nothing wrong with the motor, could this be a transmission issue?--the pistons had ALOT of grime and dirt on them, but all springs, gaskets, etc are all ok, but here is the tricky part, we cranked it manually today and all the pistons etc move nicely, just confused as to what it could be.