CohenS That amount of eccentricity could certainly be the cause. There is some wiggle room between the components being fit together (threads of innicycle, steerer tube, and innicycle quill) but not much. Nominal steerer tube thickness should be 1.59mm so those high spots at 1.96mm are the issue. I'd suggest the following:
1. See if there's some obvious burr causing the high spot and do you best to remove/minimize it. Recheck fit.
2. If it's still binding, you have my permission to clamp a stem on (down near the base so as to grab the upper race along with the main quill) and add a little more torque. If it rips it apart, I'm to blame and will replace it with something that we collectively decide will work (modified in some way) or refund you if there's no clear path forward.