Since you adjusted the hub I assume that you checked that the axle wasn't bent or broken, that you had the right number & size of bearings, the cups & cones looked OK, and both locknuts were tight. I'm suspecting that at some point in this hubs life it's been serviced and a damaged dustcap was replaced with an eyeball fit, or that some of the spacers were replaced but not the correct size. I want more clues, please.