the blades are brand new standard blades. The guy I bought it from was using standard blades with a mulch kit but he must have hit a rock or something because the baffle was bent and the blade running in the bent area was tweaked.
I leveled the deck once, mowed my lawn without the bagger, then I installed the bagger and leveled the deck again. the front of the deck is currently about 1/8 inch lower than the back.
I really think it is the design of the deck. The front lip is higher than the tip of the blades. JD markets this as an advantage when you are cutting tall grass. But evidently it does not help with the bagger installed.
tonight I should be able to get around to mowing my lawn a second time with the bagger and I will drop the mower down 1/2 inch because I had it set at 3" cutting height last time and that seemed a little tall. I hope that will help.