Kickstart rubbing on side cover?

[nbriles2000]

So I just wanted to post this one more time before I have a shop come and pick my bike up because I haven't been able to figure this out and i really wanna ride...
I'm trying to reassemble the right side of the bike but whenever I tighten up the side cover it feels like it is putting pressure on the kickstart gear. It is hard to move and it wont spring back to where it should.
I have checked http://www.cmsnl.com/yamaha-xs360-2d-1977_model8629/partslist/B-08.html#results and it seems like everything i have is there and in order. Does anybody have any ideas or suggestions? I've put on and removed this damn cover more times than i can count at this point and I would really appreciate any help so I can save my money for actual parts! Here are some pictures showing you exactly what I'm talking about

Ps. in the first picture, the gears are engaged and the gears aren't flush. Are they supposed to be?

 

[drewpy]

does spring #4 (of cmsnl) fit in the case at 6 O' clock?

does the right hand stub in picture # 4 fit in at 12 O' clock?

the gear doesn't engage till you prime the kick lever and it meshes then

I hope that makes sense?

 

[nbriles2000]

The spring is set correctly in the groove at 6 O' clock and then I wound the spring clockwise to sit on the perch at about 11 O' clock. The worm drive and spring action are functioning perfectly until you put the side cover on and tighten it up. Would it be because i am using rtv instead of a paper gasket? Would it hurt it i got rid of the last washer on the end of the kickstart shaft?

 

[drewpy]

should use a paper gasket.
the washer is to take up the slack and stop wear in the side case.
somethings not on right to cause the binding

 

[nbriles2000]

I decided to buckle down and order the gasket. Currently waiting on its arrival at the local shop
Will post if it works. Cross your fingers!