I think that "washer" was a spacer and probably used to set/achieve infinity focus.

Depending on the construction of the lens, there might not be a free-standing middle element or group. However, when a middle lens element is placed in the camera backward, the impact on image quality is very obvious. I don't think that is your issue here.

I have some theories, but without seeing the camera, it's difficult to say whether they might apply to your camera.