Try to keep this as short as possible.

New upper build, all new parts.
Aero Precision upper receiver (I am aware of recent AP QC issues)
Faxon 14.5" Gunner barrel (Properly torqued, twice, see below)
Aim BCG (Tested BCG in another upper, presented no problems)
Midwest Ind. 12.5" G3 Mlok rail (Uses MI proprietary barrel nut)
CMT Tactical Z-Comp (Flash/comp)
BCM .625" GB (set screw type)
Spikes Gas tube
Midwest Industries QD 30mm scope mount
Burris 1-4x MTAC with the newer "Ballistic AR" reticle (Small, precise reticle, not the big, older version)

Symptoms
At 25 yrds the best group I can get is 3.5"-4.5". At 100yrds 8+ inches.

I tried the scope/mount on another upper and it groups perfectly fine so that isn't the issue.
I put a known good 1-4x scope/mount on the new upper and had the same poor accuracy results.
Per Nathan's advice (From Faxon) I rebuilt the upper, inspected everything the best my non-gunsmith eyes could and didn't see anything.
I have built a few ARs with no problems, doesn't mean I didn't botch this one somehow.
After the rebuild I have the same problems.
I have already ordered another Faxon 14.5 Gunner to try.
If it also groups poorly I plan to install both barrels on uppers with all known good parts in an attempt to isolate the problem.

I have checked/inspected all the typical stuff. I am NOT a gunsmith so me inspecting stuff only means so much.
I have been in contact with Nathan at Faxon on this board and he has been a great help. I have no idea if the problem is the barrel or not.
At this point I am open to advice/suggestions on any other coarse of action besides what I described above.

Thanks!

Fairly simple check would be to remove the muzzle device and try shooting it. You could be getting bullet strikes on it.

Will do.

Thank you.

Start with basics.

Shoot with out muzzle brake/flash hider
Check crown
Clean barrel again. Inspect for fouling
Make absolutely sure optic mount has zero play and does not bridge the gap between Reciever and rail
Check play between upper and lower. Unlikely issue but .. ? How much ?
change ammo... Acceptable grain weight for twist ? Change ammo any way. See result.
Shoot gun locked down in a rest. See result.

Was able to test some more.
Changed BCG and that helped quite a bit but still not up to par with another 14.5 upper I have.
Also, A.E. 55gr.223 Shot quite a bit worse than PMC Bronze .223 55gr.
The difference was @ 1.5-2" groups at 25 yards with PMC and 2.5-3.5" with A.E.
Next I plan to change the upper receiver and start over.

With the info you have given, I would be focusing on bbl and comp.
Yank the comp.
Heavier bullets if you have a fast twist.

I have only shot 25yds once ~20yrs ago with an x39 Sporter Lightweight. A2 sights sights put 5 through the same hole, and not even a ragged one.
I would think it would be even easier to do with glass.

Keep the mfg updated and continue to swap what you can to isolate the problem. (email is preferable in case they need a reminder)
Some more rounds to run it in may help, but those groups are rough, unless you are Micheal J Fox or something.
Is it possible they put a 5.56 chamber in a 6 or 6.5mm barrel?

Thank you guys very much for the insight.
I think I forgot to mention I did remove the MD and that had zero effect on results, so it went back on considering I was at an indoor range throwing fire balls out the barrel.
Again, the biggest 2 improvements were changing the BCG and the PMC ammo consistently grouping better than the A.E.
I know both of those are cheap and low powered but they both group considerably better in any other upper.
After reading through the Aero Precision threads on some bad upper receivers I plan to replace that with a known/proven upper receiver and see where that goes.
Will also try some other ammo.
Thanks again!

UPDATE

Short version: The problem was a faulty NEW scope (Burris 1-4x MTAC w/new for '16 Ballistic AR reticle). It would hold zero enough to fool me that it wasn't the scope. But the replacement scope is fine. For what it's worth I can not say enough good about Burris' customer service, they handled it very fast and smooth.

LONG version: In the process of trying to find the problem part I had bought a second barrel and upper receiver. From that point I set the original barrel/receiver to the side and focused on the new parts. While waiting for the replacement scope I installed an older/proven 1-4 Burris scope and confirmed the "new" upper was GTG. Fast forward a few weeks...Get the replacement scope in and confirm it works as it should on the "new" upper. At this point I acquire the parts needed to build up the "old" upper and in typical BRD fashion it grows it's own new lower=another AR is born. Today I got to test the "old" upper shooting only with a red dot at 25 and 100 yards. At 25 yards it is grouping with hole-touching-hole accuracy (With the original scope at 25yrds/4x it had a 2-4" spread). I didn't shoot for super accuracy at 100 yards (like I did with the "new" build w/4x scope), instead I simply shot at a 12" steel plate and never missed it. All of today's shooting was with cheap A.E. .223 55gr ammo.

I MUST say a HUGE THANK YOU to Nathan/Faxon for the support here and behind the scenes.
I'm sure I was a pain for him at some point, especially considering it wasn't a FAXON part problem.
THANK YOU NATHAN and FAXON for your dedication to our community!