Can you post a picture of the halyard shackle? It's hard to speculate what's going on without seeing it. Ordinarily, halyards are made of non stretch synthetic braid line and the shackle is spliced on. The splice is thicker than the rest of the line and is usually to fat to ride over the sheave or go through the opening. Also, unless your boom is fixed to the mast like my O'Day 222, you should have a tack down haul with a cleat under the boom to tie it off. Maybe you need to lower your boom and the cleat for your down haul so that the Main halyard shackle won't touch the mast head sheave. That sail doesn't need to be hoisted that high. Just lower it a couple of inches by lowering the boom. Are you sure that the Mainsail is the one that's made for the O'Day Daysailer?
The sheaves on the mast head are probably made of plastic or Delrin and they break pretty easy. Try adjusting the boom lower.
