Make sure to check out the bearings, inner sleeves, and the washers on the ends. These all get squeezed by the bolts, but if something's missing or out of order it will cause a tremendous amount of binding.
Are your bolts bent? This could be caused by running with the bolts loose. If you tighten up a bent bolt it will also cause the linkage to bind.
Torque specs for the '00 KX 125/250 linkage:
Rocker arm pivot nut: 83 Nm/61 lb-ft
Rear shock lower mounting bolt: 34 Nm/25 lb-ft
Tie rod mounting nut: 83 Nm/61 lb-ft
Swingarm pivot shaft nut: 98 Nm/72 lb-ft
While your bike's torque specs may not be identical, this should illustrate that you should be able to tighten up the bolts substantially without the suspension binding. Your best bet is probably to take apart your linkage and make sure things are not bent and that they are assembled in the correct order.