The clutch cover rides pretty high in relationship to the sump (oil pan). Resting on the side stand I can service the clutch without dripping any oil as well, totally common. The missing friction material could very well cause the loss of engagement you describe, depending on how much was lost (no picts?). Follow the manual for reassembly and initial set-up:
>Loosen the lower cable adjustment all the way in
>Loosen the upper knurled adjuster at the lever all the way in
>Back off the lifter rod adjuster
>Adjust the lifter rod first
>Adjust cable at the lower adjuster first (where it enters the clutch cover)
>Final fine adjustment is made at the lever.
EZPZ