Honda-SOHC

Update

Yes it was the gearbox clutch works fine now gears change snoothly engine revs stay constant when clutch is pulled in same clutch no modifications to that.
Rode it around the block first ride.
Balance chain was in good condition the bike had only done 14000 when I got it but it a bit rusty and tatty 600 quid so to be expected.
It needed a rebore though as the barrel had rusted a bit I think it had been lying around for a while in a shed.
Now it's just getting the riding position better I think I need to move the rearset footpegs forward a bit will need to make some new plates for mounting them but ally flat bar is reasonably cheap 100mm wide.
Also need to decrease the angle on the clip ons a little so they're a bit straighter but all the engine issues are sorted.
Enclosed picture of the nearly finished project.
Thanks for your help!

Update

The selecter drum see attached pic with gear selector cap in neutral position it appears to have a lot of play on it.
Clockwise or anticlockwise about 10 degrees i.e noise it makes a dunk dunk sort of noise, LOL
Clutch test on stand no dragging so it's likely not that.
I think the gear selector forks are either damaged or incorrectly fitted somehow or the drum is worn or possible a shaft bearing or the selector rings on the shaft it takes a bit of effort to get it to change gear fortunately I have some spares for these items and a main shaft in good condition so it's looking like I'll need to split the gearbox and check it out.
A few days work I'll post the results once I have got it split.

New cable it moves freely so not that but thanks

OK

Fixed it.
The issue was very difficult to pin down I had to rebuild the gearbox twice to find it.
On the balancing weight end of the clutch shaft opposite the clutch there is a needle roller bearing it has a thrust washer, (red arrow) the bearing outer shell also has a hole which locates on a dowel pin (blue arrow) in the bearing mount.
The thrust washer pushes into a thin housing, a thin recess, just before the bearing mount with the dowel.
If this thrust washer is not seated correctly even with the casings closed it can cause the bearing to not quite seat correctly now that doesn't expose itself until the engine is put in gear, any gear, the very slight misalignment causes the gear train to lock I noticed even when the gear selector was in the neutral position it was still locked in gear, the drive sprocket wouldn't even turn making it impossible to turn with the kick start in neutral once the gearbox locked.
Picture of offending items "arrowed" attached, just one little washer caused all of that grief.

Thanks for the reply.
I am beginning to suspect the lock up is occuring in the gearbox somewhere this will invlolve a complete strip down of the engine again.
I did rebuild the crankcase/gearbox.
Just seems so bizzare though that the engine "will" change gear when turning which tends ot suggest it's not the gearbox.
The clutch turns with the engine as well.
Also it still locks up with no plates in the basket.
It is not on the crank side either the valves are lifting and closing correctly on TDC the cam chain is not stuck it turns over smoothly.
Just cannot figure out what this is.
Rebuilt quite a few engines and never ever had this issue before.
I'll go for the complete strip down that's the only way I would find anything wrong I think.
The only possibility I can think of is there's a woodruff key stripped on a gear wheel and it's spinning or jammed somewhere on the shaft that holds the clutch that's the only possible thing I can think of.

And another showing it will swing alright?

No it doesn't work with the cranks case off either.
If I turn the shaft the clutch basket goes on to via splines with its nut it turns freely but it doent turn the engine it just spins.