I'm not quite sure from your description, but you say "it heats up then it becomes really hard to turn" and "the displacer, looks a little tight I know but it doesn't touch the sides at all when it's working", so I would have to assume that the "really hard to turn" part is coming from the piston heating up and seizing in the glass cylinder.
I posted something on another thread regarding materials and heat conductivity, from the slowest to the fastest:
glass: 1
stainless steel: 16
carbon steel: 54
cast iron: 55
tin: 67
nickel: 91
brass: 109
aluminum: 250
gold: 310
copper: 401
silver: 429
http://www.engineeringtoolbox.com/therm ... d_429.html
Glass conducts (and therefore dissipates, I should think) heat slower than just about anything. In fact even Asbestos-cement (2.07) or Fireclay brick (1.4) conduct heat faster than glass.
So my guess is that your glass cylinder is heating up and getting tight on the piston.
You could try adding some aluminum cooling fins to the cylinder or possibly swapping out the glass cylinder for a piece of copper tubing or something that would conduct heat more quickly so as to dissipate heat away from the piston area to the outside air more quickly.
Basically you have heat going in faster than it is being dissipated at the piston, presumably, or from what I can gather from your description.
This may sound strange, but also, as per the theory (?) that heat is
literally converted into work, if the engine seems to have enough power as it is, it might not have enough work to do.
In that case you could try a bigger piston and/or flywheel and/or add some additional weight or external load to the flywheel. The theory being that the more work done by the engine, the more heat gets converted into work - the less excess heat there is left over that would need to be dissipated - the cooler the engine runs.
I would be very interested to find out if this later method makes for any improvement without otherwise changing anything. (i.e. try just adding some extra weight to the flywheel or better yet, embed some magnets in the plywood so they pass some coils to generate a little electricity to light a little Christmas tree light or something.
Theoretically, whatever heat the light bulb produces would be subtracted from the excess heat at the piston/cylinder.
Or more simply, just put a break on the flywheel. By gradually applying the break after the engine gets up to speed, the heat generated by the break would also be subtracted from the heat causing your overheating at the cylinder.
I would be most interested to find out if one of these later approaches helps at all before you add any cooling fins or start swapping out parts.