Just bringing this back from the dead, I totally forgot to update this thread but now that the rifle is for sale people are interested to know what the issue was. The aluminum handguard for whatever reason is missing the little bump on the underside that makes sure the piston slides back into the gas block. The fix was to simply install the factory upper handguard (without beaver barf and modified to clear the mounting screws on the new handguard) underneath. After that everything is back to normal.