I am reassembling my engine right now, and I noticed that the ring around the clutch basket is fitting loose. Is that normal?
Also, the basket doesn't come off of the cush drive easily. It seems to be a bit of an interference fit. I had to use a hammer and punch to separate them and reassemble them. Is that common?
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Depending on the year, it might actually BE a loose ring, or the correct ring for the clutch. Honda used no less than 4 different clutch rings on this clutch basket.
-There is the type that floats and is captured between the top 2 cork plates, slotted in with the steel plate between the corks. Yours doesn't appear to be that one, though: those disappeared in the K1 engines (unless you got one that was recycled within the plant, like mine in my K2, which came with that ring AND 2 wired-in cork plates at the back of the stack).
-There is the kind that is spot-welded to about half of the basket tines to stiffen up those basket fingers a little bit.
-There is the kind that is spot-welded to ALL of the basket tines, to stiffen it up a little bit more: this type usually has the wider outer tabs on the very top clutch plate, which requires that the outer ends of the tine are notched to accept this wider-fingered cork plate. This type of clutch also came with a dual-steel pair of plates that are riveted together, either right behind the wide-fingered plate or (originally) set in between the 3rd and 4th set of plates. It lets the clutch slip a bit at start. These first appeared in the 1974 bikes.
-There is [finally] the type with the loose outer clutch ring, which is captured with little dents in 4 places that correspond to 4 wide, thick basket tines. I have seen these welded (spot-welded when made) and loose (just captured by the indents into the 4 tines), never having been welded in place. Yours seems to be this last one: if you can, try to check for broken spot welds in those dimples. If they aren't evident, then it was one of the unwelded ones, most often found in the F2/K7 engines. The K8/F3 engines often had them welded.