From your description, it sounds like the rifle is extracting the empty casing, but the bolt carrier isn't going rearward enough to eject the empty casing.  This could be caused by several things like dirty chamber, lack of lubrication, gas leak in one or more of the 4 gas seals, lack of gas pressure, too short of dwell time, bad ejector, out of spec extractor, etc.      

For process of elimination, start with a thorough cleaning of the entire rifle, especially the chamber using a chamber brush and good solvent.  Once cleaned, swab out the chamber with denatured alcohol to remove any oil or solvent present, this way you have a dry chamber and can eliminate any oil or solvent that may cause casings to stick.  Next lubricate the 7 bolt lugs, and rails of the bolt carrier so they are nice and wet, using a quality lubricant like Slip2000 "EWL" Extreme Weapons Lube.

Can you manually cycle the charging handle so the bolt carrier will go all the way rearward and lock back on an empty magazine?  Try inserting just the bolt carrier (no bolt, cam pin, or firing pin) into the upper receiver, checking to make sure it free floats all the way forward in the upper receiver with no resistance.  Next make sure the bolt carrier key (gas key) is screwed down tight to the bolt carrier, and that the screws are properly staked into place.  Check to make sure the gas rings are creating a seal.  Check to make sure the barrel nut is properly aligned, so that the gas tube free floats dead center inside the upper receiver charging handle track, as if it's canted to the side it will cause it to rub inside the bolt carrier key (gas key).  Check to make sure the gas block is properly aligned over the top of the gas port.  If all looks good, then try some different quality made 5.56 ammunition (keeping in mind that the 5.56 will generally be hotter in gas pressure as compared to .223) to see what results you get.  

If it's a timing issue, then you can try different buffers, keeping in mind that lighter will have with less resistance and generally allow the bolt carrier to unlock quicker. Your running a 10.5" barrel, so you may have a dwell time issue of the barrel not being long enough after the gas port, or you could have an issue with the gas port not being large enough, generally we see a lot of 10.5" gas ports around ..093", so if you suspect it may be lack of gas pressure then you may consider gauging it to see where you are at.    

CY6
Greg Sullivan "Sully"
SLR15 Rifles
TheDefensiveEdge.com
(763) 712-0123

The 10.5" barrel will be very ammo temperamental.  Hence with the gas port so close to the end of the muzzle, some ammo's will be a hit of miss if the rifle will cycle correctly.  Furthermore, since the gas port is so close to the muzzle, the action will cycle on the brutal side, meaning that the spent case it still highly residual pressure welded to the chamber at spent case pull, and why the SBR barrels will have a looser side wall dimension as well.


So by the numbers,

Rifled cleaned (including the chamber scrubbed with CLP and a chamber brush by hand), and the upper receiver bearing areas CLP lubed as well, load only a single round into a mag, charge the round while leaving the empty mag still in the well, and fire the round.   Did the bolt lock back on the bolt catch (catch in front of the bolt, and not under the carrier)?   Was the spent case ejected as well, and how far did the spent case travel and in what direction?

If yes, the spent case traveled between 10' to 15', then do this about 10 to 20 times (or just load a mag and shoot them).  During this test, did the spend rounds failure to extract, the bolt failed to locked back on the catch?  If you still good, then at what point does the bolt stop locking back, or the rounds not ejecting cleanly.


Get me this far on how long the rifle will cycle and ejector correctly, since the devil will be in the details, and this will be a snap to resolve.