That is exactly the right piece. Its been awhile but if I remember correctly that piece has a rectangular hole allowing it to go on the shaft at 0 or 180 degrees. I put mine on 180d off and it resulted in the teeth of the kick start always being engaged, as opposed to only being engaged on the down stroke.... or something like that.
I dont recall the direction, but it was pretty obviously wrong once I tried to figure out how the kickstarter as supposed to work.