This 1x7 bike has been fine for ages but I left it way too long to change the chain. So I bought a new chain and a new SRAM 7 speed cassette and swapped them over.

The derailleur is admittedly cheap (SRAM X-4) but I feel like it should be folding back on itself when using the small cog to avoid the slack chain. I've definitely sized the chain at least a link too small but as you see, it's mad slack. It was similar before I replaced the parts but not as bad.

There's also a pretty nasty grinding/friction-y noise coming from somewhere when I put power through the pedals, especially in the lower gears. On the stand it's spinning and shifting fine, even with the slack chain

Any suggestions? I probably need a more beefy SRAM MTB rear mech?

The cage is failing to double back on itself to retain tension and I'm fairly sure I don't see a lock on the derailleur itself so I would say the spring mechanism has failed for some reason.

With only a single chainring in the front, you could get any short cage mtb derailleur for cheap and swap it out in a jiffy. That'd be the route I'd take.

That chain is too tight

While you're in there fixing the chain check the spring and lube the pivot

Yeah this ,there is likely a little button you can push too keep it extended like this ( for working on it?) should self release but might be bit stuck

I think it's too cheap to have a clutch

It is way too tight. I originally sized it Big to Big (well I only have a single ring at the front so that's always big), then adding two links.

This was my misguided attempt to try and take the slack out in the higher gears but I could see straight away it's barely engaged in the low gears so I'll try again.

It doesn't feel like this derailleur has enough power in the spring to put enough tension on.. I'm using a SRAM shifter with SRAM derailleur and cassette, I have some old Shimano derailleurs, in theory should the pull ratio be compatible?

Was thinking about a cage lock

In this era and level I'm not sure but it'll probably work. I used big/big add link and never had issues so maybe double check that. I think all the weird torgue that came from the short chain has probably damaged the cage pivot.

I'd just pop it all apart clean and lube everything, measure the chain, and put it all back together.

But too loose in the first pic. Something is stuck on the derailleur.

The the cage is not returning which is why I brought up taking it apart cleaning it and reassemble.

When I was giving classes at the co-op the take apart and reassemble it almost always fixed weird non-obvious problems

I never had one before, I doubt it has anything like this but I'll check
Thank you!

I'll give it a go - thanks!