I've been reading lots of great posts about Banshees on this forum, but I've never posted before. I've scoured the web looking for others who've had this problem, but I can't find anything, so I'm hoping someone here can shed some light.

With the bolt closed & the magazine inserted with 5 rounds....When pulling back the charging handle to chamber a round, the bolt only travels half way back then stops. I can see that the BCG locking lugs are caught on the bullet seated in the magazine. The bullet is a polycoated, lead124 grain round nose. There is a deep gouge in the bullet caused by the locking lugs. When using jacketed bullets, I encounter some undue resistance, but I'm able to get the handle all the way back, because the lugs don't cut into the jacket, although there are some scrape marks.

With only one round in the magazine with either bullet type, I don't encounter the problem. It seems the increased spring tension with multiple rounds is causing the hang up. Has anyone else ever seen this? I messaged CMMG tech support, but haven't heard back yet.

Loading with the bolt open presents no problems & firing/cycling works fine. A concern I have when firing the weapon is that the locking lugs may be still scraping or gouging bullets when cycling. These lead bullets are extremely accurate when fired in multiple pistols and my CZ Scorpion, but the groups are really big with the Banshee.

BTW...this is happening with the factory Duramag & 2 Metalform mags.

Thanks for any help with this.

I see you are using Colt pattern mags.  What lower are you using?  
Are you aware of these parts? https://cmmg.com/rdb-lower-parts
CMMG makes different parts for their old Colt mag lowers to run with their RDB system but note that they are different if using Colt/Metalwork or CPD/ASC mags.
ETA:
Straight blowback requires raising of the mag height compared to gas operated/RDB which have a similar bolt / carrier relationship.  So if you are running a Colt mag setup designed for straight blowback it will be too high.
Here is a link to my site detailing how I got unmodified Colt mags to work with my Hahn block and CMMG RDB. https://c3junkie.com/?page_id=374

I did all that before CMMG came out with their conversation parts I linked above and now offer Colt mag lowers that are now drop in.

I have read about that here and on other forums, so I contacted CMMG and asked if Duramag and Metalform SMG mags will work with my MK9.  Their response was "Just standard colt style magazines".  It came with a Duramag and as far as I can determine, the Metalforms SMGs I have are standard Colt style magazines.  I don't know what lower I have, as I was not given an option to choose one when making the online purchase directly from CMMG.  Thanks for that detailed info you provided.

NOTE: I just compared the Duramag to the Metalform inserted in the banshee.  The Duramag sits a hair lower than the Metalform and the charging handle comes back more easily over the lead round nose, although it does make a scratch in the bullet, but not as deeply than with the Metalform.  Hmmm....seems like customer service steered me wrong.  Had I known about the discrepancy, I would never have purchased the Metalforms.  I'm anxious to see tech support's reply.

Yes, I have 1 Duramag and the rest are Colt / Metalform.  Eyeballing it....it does appear that the Duramag sits lower which is why they sell two different conversion kits.