I guess this was the issue with the broken pulley. The half circle key wasn't sitting correctly. It was also seized like that. I remember it being like that when I first fitted the pulley. I didnt know that the key was a separate part, so I just assumed that is how it should be. Didnt actually think much about it.
Just for the "belt and suspenders" minded like me, I would clean the end of the shaft thoroughly and then put a couple of drops of oil on it and on the key to ensure that the pulley makes it all the way in.