Just catching up with this. I too have had issues with my Alton.
First off - I think that you have your crankshaft nut on the correct way around. Every piece of documentation and video posted on how to install it has the step facing inward (like the original nut, only a much smaller step).
Second: The keys do shear. A friend of mine has had his shear repeatedly. I have had mine sheer once. I am developing my own fix for that. Alton is well aware that the keys sheer.
I have also had my share of bad luck.
The first issue I had was a lack of ability for the alternator to develop adequate current to keep the battery charged while powering the rest of the electrical system. My bike has all LED lights, and only requires about 45 watts to power it running down the road (engine running, head/tail lights on). This was diagnosed as a faulty alternator rotor, and Alton provided me a new on under warranty. Charging woes behind me.
The next issue I had was with the solid leads off of the alternator stator fracturing, likely due to vibration, and maybe all of the other issues I had gone through with alternator. I have crimped/soldered 16AWG multi-strand leads to the broken off stubs of the stator leads, and supported them to the central boss in the inner primary. Multi-strand wire is much more tolerant of vibration. No issues since (knock on wood).
The next issue requires pictures.
I was riding along when I noticed my charging system had quit (based on all of the alternator issue I have had, I have installed a permanently mounted digital volt meter for just such occasions). Me thinks I have broken a wire, I was only a mile from my destination, and only 10 miles from home. I shut off the headlight and continue.
I go to leave for home, hit the starter, it spins, but the motor does not. Bike starts first kick and I head for home.
Arriving home, I put the bike up on the bench, pull the primary cover and this is what greets me:
View attachment 80289
So, not good... Thankfully no other damage (other than the previously mentioned sheared key), and Alton provides replacement parts with no question (other than the key of course - lol).
I continue to disassemble the sprag clutch assembly to determine what went wrong. I notice immediately that the drive flange carrying the torque from the sprag clutch to the crank shaft is only about 2mm (0.083") thick and that the fracture path runs through the two shallow threaded holes in the flange.
View attachment 80290
This indicates that the crack leading to the fracture likely propagated from the sharp root of one of these threads. For the life of me, I have no idea what these threaded holes are for. They look like they could be used with some sort of puller, but the thread engagement and the strength of the material would destroy the threads before generating any significant pulling force.
View attachment 80291
While they are not as defined as they would be in harder materials, some beach-marks are visible in the fracture zone, indicating metal fatigue.
Alton mentioned that they have seen this at least one time before. This was after about 4000 miles of travel, and less than a year after install.
As i am not yet ready to give up on my electric start (too much money invested to turn back now), I have taken to CAD to develop my own stronger replacement parts, which I am currently machining out of 4140. They hopefully will deal with both the above issue, and will render the alternator key redundant, and therefore, no longer an unintended weak link.
FWIW.