UPDATE

Okay, I took another look after a bunch of caffeine. 

I think I solved the mystery of my clutch starting and ending with a friction.

The TOP disc is just under 4mm in this engine.  The others are worn way down closer to 3.5mm.  (Note that in my picture edge of top disc is slightly different color than the rest). There are also 6 frictions, not 5. 

What appears happened in this engine is someone put an extra friction in to compensate for a severely worn clutch.  Makes sense as clutch was adjusted to minimum internal freeplay (lever as high as possible) and there still was a fair amount of lever movement until resistance was felt...  this would happen with a slightly taller than stock clutch pack.  It did work though!   

If you have five new 4mm thick discs and five steels, ending with steel, I'm confident now that should be correct for your bike. 

 

A lots been happening while i've been sleeping so i'm a page behind. On Jez clutch back a page or two i can count 5 friction--one a different color.
I'll try & keep out of it for a day lol. Just remember--as i said, if plates are thinner be careful the pressure plate doesn't bottom on the hub before compressing.
Looking at the pressure plate pic there doesn't seem to be a lot of depth at the outer edge--angle of pic maybe!!.
Was going to say--could you in desperation add a piece of flat to the face of the actuating piece to get it closer to the rod. Or would that put it too close to the center line & reduce lift.
Ok shut up "me" lol.

Just to follow up if you have five 4mm frictions and five 1.5mm steels you should have a total stack height of about 27.5mm.

The worn out clutch with an extra friction someone added has a total stack height of about 28mm. So someone compensated for the worn discs by adding another friction disc that really doesn't belong.

The important point is that your clutch stack should be just fine. With brand new discs you should expect lever will need to be raised all (or nearly all) the way up with eccentric screw at which point you should be able to rotate the lever on top of the engine a tiny bit forward before it contacts internal pushrod. (Lever on top of engine should hit resistance of pushrod trying to lift pressure plate when it's still pretty much pointing straight across the cases... maybe angled a tiny bit forward from straight across.... but not much)

everything that has been said is logical . i have the right components in the right position bearings , spacers ,clutch plates etc. the only thing that i cant verify is the length of the push rod . so i am going to reluctantly remove the engine open her up and measure/replace it . i think this was a step backwards for yamaha to use this mechanism.i have restored a CT 3 and an AT3 and prefer that type of set up .thanks for all your advise guys .

I posted a picture of and measured the depth of the pushrod.  No need to split cases to check.  You could buy a caliper for about $20 if you don't have one.  Or use a coffee stirrer or something like a stick to estimate the depth and compare to your pushrod. 

Or you said you tried a 4mm ball...  also simple to put ball in, lower adjustment all the way, and see how big the gap is between the underside of the mushroom and end of shaft.  (If it's close to 4mm, probably isn't the internal pushrod.)  Oh, and the correct ball would be 3/16"  (same as upper steering head ball bearing) not 4mm. 

There was a revision to use a ball on the 74-76 design.  Looking up the parts, they used the same outer "mushroom" pushrod with the ball and just a different inner pushrod.  Plus the aforementioned 3/16" ball. 

If you do split the cases, it will be interesting to see what you find...  only seems to be 2 stock options for the inner rod...  with and without ball.

does this measurement look right ? 

Right for what?  I'm not sure what you're trying to measure?

I was talking about measuring the depth of the pushrod inside the shaft with lever at its lowest position.

See post 46 in this thread.

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I wanted to verify that the basket was in the correct location. If it was 3mm closer to the casing that would make a difference? Just want to rule everything out before I have to open her up .

The gears align in your picture so extremely unlikely...  not to mention basket would rub on kick idler..  And if it could somehow be too close you would not need to add to the pushrod, you would need to shorten it.  I have put my old engine back together and I'm not taking it apart again for that measurement.

I'm sure I gave you everything you need in measurements to figure out where the issue is without splitting cases.  Have you verified the depth of your pushrod inside the shaft with the eccentric screw adjustment lowering the lever into the case as far as it go?

 

The bottom line is if you can verify the pushrod depth at "maximum freeplay" (lever down as far as it can go with lever pointing across the case and pressure on pushrod to make sure it's in as far as it can go.. for a reference point since that's how I measured), and measure your removable "mushroom" pushrod like I did it should tell you if you need to split the case.

If your depth measurement under the above conditions is significantly more then something might wrong with the parts inside the case. One exception is if your measurement is about 3/16" (~4.7mm) more than I measured, you need a 3/16" ball as someone likely used a 1W1 pushrod instead of the 401 pushrod internally.