So, the bike was running, I took it out for a few laps around the block, and noticed a slight bog at about 1/4 throttle. I brought it home, and cleaned up the carb, and when I went to start it, I got the dreaded kickback. I have good spark, but it seems to me that its firing too early, and kicking back(just a guy feel). I gave up trying to start it after nearly breaking my foot. 
 I've heard that the likely culprit is the pulser coil, or a sheard flywheel key. The key looks good, but when I took off the cover a decent size rock(no idea how it got in the unbroken case), and some water fell out. Theere is some corrosion on the steel, and aluminum parts, but it doesnt look excessive. i tested the pulsar at it reads 87.5 ohms, so a little lower then it should be, but close. 
Has anyone else dealt with this? Should I just get a new ignition kit from Rex? Is the little pickup tab on the pulser supposed to be bent over? Would that cause my issues? 
Any help I can get with this would be great, as I really dont want to put $400 dollars into a new ignition, and have the same problem. 
thanks. 

My DT400B had water behind that cover when I got the bike. It had entered into that area due to a broken piece of the crankcase around the wiring grommet. The side over itself was not cracked. I ended up converting mine be to points and condenser with parts from a DT250B. It was the best thing I ever did to that bike. It starts so easy and runs so strong it scares me at times.
 
 

If it was ok at the start & no good when ya got home i still suspect the key if you've 'not' had the flywheel off & just looked behind the nut & washers. Sorry if i've got the wrong idea. Otherwise pulser. Not sure if crossed pulser wires do that if its the early style white with green tracer & white with red tracer. Mind you they're not going to get crossed on the run.

Thanks guys. 
the cases, and the cover are sound, no cracks. The water may have gotten in from the vent(no hose anymore) but the rock is a mystery. The only thing I can think of, is the PO missed it when they had the cover off or something??
 The flywheel is off, and the key is perfect, I was really hoping it was just that! Running pretty good one minute, took the carb off to clean it up a little, and within an hour, I tried starting it again and got the kickback. Waited untill the next day and tried again...same thing. That's where I stopped because my foot was not gonna handel another kickback, its brutal! I've owned a few big bore single kickstart only bikes (kx500, and dr650) and never had them kickback like that. Sometimes they would stop you pretty hard, but nothing like this bike was doing. 
  Dont think its crossd wires, as it has the stock, triangle shaped plug for that coil, and seems to be in good shape. 
  Has anyone else used the system from Rex's? I dont want the 12v upgrade system, but they do offer the standard, or "race" versions. Leaning towards the standard version since it's just gonna be a local commuter for the most part. 

Several threads on Rex's...  several have used their stuff.  Mixed results.  All I can suggest is search the forum and then if you feel lucky, roll the dice.

I've read through some of those, and most seemed to be from a while ago. Looks like Rex's has revamped some of their stuff since what I read. There's also the powerdynamo/vape system, but I dont like the lack of flywheel keyway at all, and they're significantly more expensive. 

Sounds like you feel lucky! 

After the journey I've been having with this bike, the last thing I'm feeling is lucky! 

Going to be interesting when the cause is located. I see on partzilla it has the troublesome old style two stage pulser. Retard for starting then jumps to advance & stays there. Mine on my DT360A stopped operating on retard so wouldn't spark or start. Tested open circuit so somehow i altered it my crossing wires to use the advance half. Had to kick it good but no worse than an RT2 for kickback. But kick it hard enough & didn't kick back. Sounds like yours is worse than that. I'd strobe it with someone kicking with the plug out & verify just how advanced it is. Sounds like its way past 3mm btdc. Past meaning before so more than 3mm early. Can sympathize with your foot, we've all been there.

Just re-thinking, is the stator plate slotted or is the pulser coil moveable itself to just retard it a bit although sounds like something's defo faulty.