Ok so I've never written a guide or posted pics on here before but i think i have it sorted out. If I'm not clear let me know.
This is the spot i had to file down.
http://i1341.photobucket.com/albums...015-04-06-21-58-07-1_zpsugtftlzf.jpg~original
To do so easily i removed the front block and flipped it up
http://i1341.photobucket.com/albums...015-04-06-21-57-48-1_zpsfb2myiv4.jpg~original
I also bent the catch spring a little bit to push down harder onto the catch... (sorry i forgot to mention this before, but its really easy to do.)
http://i1341.photobucket.com/albums...015-04-06-21-57-17-1_zpsdhe00lim.jpg~original
To gauge how much had to be removed i inserted a mag with 1 round into the frame without the slide. when i pushed the mag into the well hard i noticed that the catch pushed past the groove the slide rides in. So with 1 round in the mag, it definitely caught the slide... I had to remove a little material from the spot in the above pics using a small flat file I bought. It didn't take much and it cleared the slide. Keep in mind it was important that i was pushing the mag with 1 cartridge into the pistol while i was checking this clearance. As i worked i kept checking it with an empty mag to make sure it was pushing plenty hard enough up to catch without any ammo.
I took my time... I was worried I'd end up screwing up my new gun or having to order a new part.
http://i1341.photobucket.com/albums...015-04-06-21-55-43-1_zpsfjkzvnuc.jpg~original
Now with one round in the mag and pushing it into the well, the catch clears the slide by a tiny bit, but it does still move a little. No more problems with it hanging onto the last round.
So my verdict.... With a little work my gun works flawlessly. Since putting in the new recoil spring and the other work to solve the 1 round left issue I've put about 1000 rounds down range without a bit of a problem. I think the problem is caused by a bit of sloppy tolerances in the manufacturing of this gun. I'm glad some peoples work well for them, but in my case it took me hours of work and reading to figure out what the problems were and how i thought best to fix them. Since I'm new to handguns I do actually appreciate the learning.
By the way... I'm not a gunsmith. You start filing on your gun, and screw something up, don't blame me. I'm just telling how i got mine to work right.