I have got to stage 403 and, whilst I have had problems fitting the pieces together previously, at this stage I simply cannot get the stalactites or stalagmites to fit into the studs - they seem to have a bulbous end and they simply will not fit. Is glue the answer? Has anyone else had the problem?
Given your description of what doesn't work for you, the only thing I can think of is that you're trying to insert the 1x1 round stud with hole (the middle part in the assembly) upside down. Look closely at the image, and make sure it's the right side up, and it should fit just fine.