Hi Chris,
A quick look at the pictures and my £0.02 x $/£ exchange rate ...
Similar log file error to ones I have encountered which for me meant I 'ran out' of stress-strain curve; no more curve to work along as values are too high.
If you are to use contact, I would be tempted to bring the components into contact in the assy first. The initial large movement (zero stiffness gap), surfaces may 'miss/overshoot' and will make iteration look as if oscillates; taking much longer.
Again, if using contact, I would consider small rounds rather than square edges. Though this means more fun meshing and more contact interfaces; stresses/strains may be high but more 'sensible'.
Regards
Charles