Ah, that brings back memories of keeping warm on cold Illinois winter nights...sweating, actually. I can still feel the ache in my right shoulder from the turning... But, what else can you do with your bike in Illinois in January and February?
Your setup looks good, if you bolt on the other case so all the gears get involved. I used fine compound on the ones I did, because in those days I wasn't sure of what I was doing, yet. If you look closely at the teeth on the gears, you will see the tiny hog-cut steps: you want to knock the edges off, at least. On the road, this takes about 20k miles of touring riding.
I would turn a while, then separate the cases to make sure the compound doesn't work its way into the bronze bushings, repeat until bored. It only takes a couple of the 8mm bolts to hold the case together well enough for this process.
Some time ago, someone on this forum found a way to make an electric motor setup for this process. I think it only took minutes to accomplish, and I also think he said it took many hours to clean the fast-moving compound out of everywhere it went! Keep an eye on that stuff: it doesn't take much of it in a bronze bushing to tear things up.
