In case anyone ever has this issue, I figured it out:

The back tension arm is meant to be pushed by the left shuttle. It has a black plastic hook attached to the metal arm, which pivots on a rod and "grabs" the base of the full erase head (which stops the arm from moving further)...but it should not be allowed to pivot. It has a little notch on the bottom that fits into a hole in the metal arm. When the hook is fixed in place, its precise angle will allow the left shuttle to push the arm to the front. If it's allowed to pop out of place and pivot, the back tension arm will instead block the left shuttle.

I'm tempted to superglue the stupid thing.

Now I just have to figure out how to get the timing right again...maybe the pinch roller assembly slipped some teeth or something.