Have you tried changing the oil level from 160mm to a greater number (lower level) yet? When my forks were overfilled, I had maybe two inches of travel before the forks seemed to "lock up". Lowering the level to about 215mm eliminated the locked up feeling, but felt under-damped. I'm going to try about 185mm next.
This chart from my CR 480 manual shows the relationship between oil level and force required to compress the suspension. The actual numbers don't apply to our forks, but the principle is the same.