Just When I thought I was done...
The kickshaft binds against the clutch cover. This was an issue with the sandcast and thru the k1 series engines, and it happened early in the K7 series also.
What causes it is: the crankcases were ground slightly too far inward on this clutch cover surface, usually (in the K0/1) because '#$%*s' (i.e., tiny air pockets) would show up in the gasket surface around the clutch-side sealing surface, which would leak oil. Honda was frantic that this bike should not leak oil like the British bikes did, and sometimes the machinists got a little overzealous (IMHO) to try to prevent it. They would just grind the surface a tad more to 'clean it up', but the shoulder of the kickshaft, which rides against the clutch cover, should then be correspondingly ground back to provide enough clearance to let it swing. Someone didn't do this second step in this one. Since Honda's OEM gaskets were slightly thicker than the modern Vesrah versions I use, the kickshaft didn't stick enough to be a problem at the factory: the first time someone (before me) changed the clutch plates, it DID become an issue, and the case markings showed the interference. The electric starter saved the day for using the bike, but the kickshaft must be pulled back up, once kicked down. This was the "hand built" sort of treatment the sandcast engines received.
I should note that it isn't just this clutch cover that got this extra-grind treatment: sometimes the alternator and tranny covers' surfaces got it, too. The tranny cover side usually has enough clearance behind the shifter shaft's face to tolerate it, but I've had to relieve the face for that shaft into the crankcase before (long time ago) when the tranny cover of an engine needed replacement and the new one wasn't relieved like the old one, same situation. The shifter would stick in the shifted position until the engine got fully warmed up, then it would move OK. That one took a long time to figure out, too!
After I discovered this one's grief, I Dykem'd the surface of the case where the shiny spots are (the kickshaft stop surface is VERY shiny from use) and put it all together (for the 10th time) to find the interference: it is a full arc on the top half of the hole. This matches with the shaft sitting in the slightly downward angle that they all do. I need to find a way to relieve the inside of the clutch cover about 0.002" in this area: if I still had the bottom end apart I could stick the kickshaft in the lathe and trim off the 0.002" I need from the flared stop on the inner end of the shaft, but I'm not tearing it all back down for that(!).
Oh, to have a mill...