Was pulling the right side cover off to change the clutch discs and heard a washer fall. This was sitting at the bottom of the cover when I pulled it out. Any idea of where it might go?  Or am I imaging things and it came from somewhere else lol

 

 

 
 

It fits on the end of the plastic helical drive for the tacho, the white gear in your last photo

Awesome thanks for the quick response!

When I took the cover off originally the kick start shaft/mechanism came with it. I put it on and it's on in that pic but when I put the case cover back on and tightened the bolts the kick start got hung up and wouldn't return to resting.
If I loosed the cover bolts some it would free up and operate normal.

Is there a special way to install it? I'll try and get a better pic later

On the second photograph it looks like the washer on your kickstart shaft has an oval inner diameter.
I wonder if it has worn over the years and after the cover was removed and replaced is not sitting true causing the cover to pinch/compress the shaft assembly when you screw the cover on.
Has the inner boss on the cover worn to leave a lip.
Someone else recently added the washer and had a similar problem with the kickstart not returning, I believe they eased/filed the boss on cover.
Another though, did you replace the cover gasket and if so was it an OEM gasket, some aftermarket gaskets are thinner?

Thanks I'll review later and report back. It was an aftermarket gasket set

www.ebay.com/str/kishmotorsports
 

Is the kicker gear spring in the groove in the case? Is the kicker axle stop against the case stop? Not that it will affect the return of the kicker, but you have some serious grooves in your clutch basket fingers. As noted above, the shim on your kicker gear looks like it has a lot of wear on the id.
Your kicker gear and the kick idler gear should not be engaged when in the up position.