So a big thanks to who helped solve this issue.
It did turn out that the bell curved steel plate was the culprit. I ordered a new flat standard steel to replace and it all worked out fine. Lesson learned.
Thanks folks.
Now though I have a new issue.
When get the bike in neutral and start the engine it drops into 1st as proper. I'll take off and shift up through the gears. When coming to slow down it will shift down 6th,5th, 4th and 3rd fine.
After that it will not shift down any further. I can't get into 2nd, neutral or 1st.
If I shut off the engine it still won't shift down but after rocking and fighting the shifter it will finally find neutral or 1st though the neutral light will not come on.
Then I can start the engine put it in 1st and it shifts again up through the gears but it does it again.
After I did the clutch I put a new oil filter on and filled the engine with 10-40 standard oil that was marked for 4 stroke motorcycles.
Any ideas what could be happening?
So, first things first, see if ya have a bad neutral indicator bulb, pull the left side cover and ground out the wire coming from the sending unit, its either a bad bulb and or a bad sending unit (personally never seen a bad unit but it can happen).
Then (and you're not going to like it) pull the right side cover, then the clutch basket and inspect the shifting linkage between the shifter shaft and the shift drum. There's a tanged fork that rotates the shift drum, (a couple of summers ago I had a very similar issue, I did a post on it, damned if I can find it) sometimes one or both of the tanges can get bent from hammering the shifter on downshifts (thats how I did it). It can be straightened if its not too bent up to badly, then inspect the indexing pins on the shift drum, they could be damaged as well and make sure the retaining bolt is tight. But if that doesn't remedy the issue, it's very likely you've got a bent shift fork, which necessitates splitting the lower halves to repair. Even then you may end up replacing a shift fork and if the linkage if its bent up bad enough, which is not as bad as it seems. It's a good 2 day project though, I've done before.