I
It appears that the start circuit wiring is coming from the lathe wiring it may not start going direct to the motor with 220, if it doesn't. Do not leave the power on for more then a second or you could burn out the run winding.
I have made the assumption that you have tried the lathe in both directions and that it starts both ways.
If three and two are not connected you would not get any movement but just a "humm" from the start winding.
Just a question, what speed are you trying to run this at , is it belt driven and is it possible that the lack of torque is slippage in the belts etc. From everything you have shown it looks to me that it should be OK. Electrically Maybe ULMA DOC will see something we are missing, you might PM him and ask him to look at it. This may need a new set of eyes.
Art B
I've been running it wired this way for a few weeks now. Runs in both directions just not much torque so I don't think it's running on the start circuit. It's not belt slippage because I can hear the motor slow down when taking a cut. In fact first thing in the morning when the head stock oil is cold it takes as much as 30 seconds to get up to top speed. As the oil warms up it ramps up much quicker.
Edit: I run in in the low range which gives me a top speed of about 800 rpm. Taking a .030" DOC with a feed rate of .008" per revolution on 2" mild steel round just about stalls the motor. Didn't have this problem when it was wired for 110v service.
Tom S.