Were you using a baitcaster/overhead reel or a threadline as you mentioned a penn 850 ?
Im guessin a penn 850 , and generally you would get wind knots , not birds nests. Wind knots are usually down the main line somewhere..either in the guides or after it leaves the tip and the braid goes out as a clump. Birdsnests are when you are using a baitcast/overhead and the line overflows onto itself around the spool and your reel jams up and you have to try and un pluck it from the spool.
If you have overfilled it would cause that, and since the lure you are using is quite light , the braid isnt packed on tight when you retrieve. You need to pinch the line before the reel every few casts and make sure its wound on under tension. Or you could use a heavier lure.....