Ski-Doo seems to have acknowledged this problem also and redesigned their recoils for that motor. Do you have the recoil with a gold metal housing and a metal retainer ring all the way around it? That's the old original style.
About 2 years ago I gave up rebuilding and bought a brand new recoil assembly from Ski-Doo for my 98 Formula Z 670. The replacement was COMPLETELY different and significantly upgraded. It's in a black plastic housing, retained by 4 bolts that actually screw into a new aluminum collar that bolts to the block (collar is included with the new assembly) which does away with the one bolt steel retaining ring, it has a smaller diameter and slightly longer rope, and has been 100% trouble free for me the past 2,000 miles. As an added bonus, it was several pounds lighter than the original one (I actually weighed them but have forgotten the numbers.)
If you just pony up the cash and order yourself a new one from the dealer, it'll be the best $120 you'll ever spend on that sled.