Hi Ron.
Sorry to hear about your 2nd gear issues. Look at it this way, at least your symptoms are different from your original
Oil circulation problem?...getting hung up in neutral thread. That means you've made progress! OK enough cheerleading
let's see what we can figure out.
Popping out of second is a fairly common issue with the 750, it's one of the first signs of transmission problems. It's common enough that people frequently have their transmission gear dogs undercut in order to prevent this problem. Ron (MCRider) had this done, he has some nice pics in his build thread.
Shifting from first to second involves movement of the C5 gear (see pic below) and is done by the leftmost shift fork as viewed from above. The reason it's popping out is often because the shift dogs on C5 don't fully engage into the slots on C2, and C5 pips back to the left a bit under pressure resulting in your false neutral.
The odd thing here to me is that after this has happened, lifting on the gear shift lever usually puts you back into 2nd gear. From your post, when you do this you end up in 3rd. So, I suspect that your problem is actually "overshifting" wherein when you shift from first to second, the shift drum rotates too far and you end up just slightly PAST second gear, in other words, C4 is partially shifted.
I'd start by removing the shifter cover (aka "mission cover") on the left side of the engine and then working the shifter as you observe the end of the shift drum. The little bits around the shift drum (positive stopper assembly) are supposed to control the action of the shift drum so that it stops in the right positions. Your problem may be there somewhere.
hope this helps
mystic_1
