Hmm the way I read it in the book was (starting outside and moving in towards the engine) Hub/clutch sleeve, seat/flat washer, wave washer/concave washer, disk 1. At this point I'd be happy to be wrong and have it fix the problem. So are you saying the wave washer should be between steel parts meaning, Hub, followed by wave washer and then the seat/flat to the inside of it, basically sandwiching the wave? If so do you also know which way to face the wave, I guess I could be wrong on that too. I had hub, seat, wave, disc 1/larger disk. It was sitting on disk 1 like this
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Smaller part in on the hub larger opening on the disc, hope that makes sense, is hard to put into words.
Another thing I noticed is with side cover on, no oil, not running it won't move in gear, with lever in it does not want to move but with a little push it will then break free and roll. Does it need to be broken in at all. I only let it run for a couple secs and when it grinded into gear I fearfully shut it down. So it seems to drag like either it's getting fully pushed out or it could need lube, the longer rod however pushed it out of spec on the index. Maybe with oil in and running for a couple it will loosen up, or maybe the wave washer issue will fix it. I hope so, I think the next set if this doesn't work is setting it on fire.
Again thanks for all the help.