so I put the bike in first and let out the clutch. the bike gives out a horrible grinding noise, lurches as it is moving, second on up doesnt engage, and the bike "catches' and gives me intermitent resistance as tho the clutch is out (when in fact it is in) when i roll it back and forth. a buddy says there is something inside the case that is rattling around catching in the gears, and that it is probably a gear tooth from the transmission since it's all jacked up. what do you think?

 

May be shifter pawl spring broke. Happened to the 80 model 1000 i had. Opened trans & relaced springs & top hats & good as new.

 

+1 on Bodeans comment. This is a common problem with Sporties.

 

With the bike in neutral, outer primary off and the rear wheel in the air see if you can spin the rear wheel without the clutch moving if you can't then it is possible that the bearings in the main drive gear have failed and welded themselves to the mainshaft.