Now that the chain is off, try and spin the axle. Does it spin freely? Did your engine possibly move and tighten the chain a lot? If not, check your rear bearings. Probably not it, but put the starter nut back on the shaft and try to wheel it around either by hand or with the 17mm socket to check for compression/stuck piston. I don’t see how that would lock up the axle, but it’s something to check for. If everything checks out, clean bearing and all surfaces with brake clean and grease the bearing. Make sure you pay attention to what way those washers face when being installed. One is coned(clutch side) and the other is stepped (between drum and starter nut). Once back on see how it spins.