Ok, I think I have the final gear sorted out. I found a section in Hondaman's book that speaks of this and there should be a larger gap (2mm) between the two final gears. Also, the side with the L stamped on it has a bit of wear that is the same diameter as the C1 bushing. So I'm going with the L stamp facing in which also gives me the biggest gap between the gears.
Thanks for everyone's help and photos. It is greatly appreciated!!