Sorry for the late reply. Don't know if you got this resolved or not. Without seeing your boat in person, I only have a few other thoughts.
The two nuts on the steering tube, where it passes through the transom adapter, should not be tight. There should be a rubber grommet that seals the steering tube to the transom adapter. The rubber grommet also allows the steering tube to swivel as the steering cable and nozzle move through their range of travel. If the steering tube nuts are torqued tight, making the steering tube rigid to the transom adapter, the cable will bind.
The long threaded portion of the steering tube is used as adjustment to center the steering. Ideally, I would like to see no tighter than a 2' bend radius on the steering cable.
With the cable disconnected from the steering nozzle and the steering nozzle straight, turn the steering wheel all the way to one side lock. Now count the number of rotations as you rotate the steering wheel to lock in the opposite direction. Then rotate back half the turns lock-to-lock. The hole in the end of the steering cable should align with the hole in the swivel. If not, adjust the steering tube in/out until the holes align. If necessary and/or possible, flip the steering tube end-for-end so you have the most generous bend radius in the steering cable.
Lastly, it could be possible that your helm has so much wear that it binds when under load. Simply having the steering nozzle attached could be sufficient load to bind.
Good luck,
Joe