Success! You hit the nail on the head or in this case the hammer on the head.
It turns out that I must have pulled the trigger when the gun was partially disassembled (only the barrel was removed). This released the hammer and the bolt was thus getting pinched on the sprung hammer when moving the slide in the forward direction.
It actually made more sense when I found the following military break down manual:
Figure 5-7 shows the release of the hammer during trigger group disassembly.
The trigger group came out of the gun with the hammer already released, so I didn't have a point of reference to begin.
I assume this is exactly why the Winchester manual states: Do not pull trigger after disassembly.
I wish they would have also included the resolution for that issue.
Thanks to everyone that assisted in bringing this thread to a successful conclusion.
I now know my Winchester 1200 much better than I ever imagined.