Yes it’s at BTDC, counter clockwise to find TDC, went clock wise 3mm, then back counter 1.2

I did not install the bottom end on this motor unfortunately. 

I’m think my only course of action now is…

1. Loosen governor and confirm it’s catching the tab on the armature.

2. Find a armature puller and check the key.

Do you have a governor on the spare engine?  You could try swapping/comparing if you do.

I do, I practice tore apart the parts bike assembly as a test run before I touch the hood bike. The governor on the bike didn’t “grab” the tab in the armature, I could install it any direction and it would install flush and true. I’ve been too nervous to pull the governor off the hood bike, just gun shy to break anything! It’s been a challenging build in that department. 

this is the parts bike governor, I slipped it in the armature to show how the tab doesn’t engage on the PARTS bike. Or does that collar need to be hammered in to make the pin set?

 

The governor should easily slip right in the slot Nfinitecc, on your spare engine it looks like the wrong governor for that engine. Yamaha made singles and twins with the same arrangement and although they look the same there are differences. 
 Having snapped this bolt before I understand your reluctance to attempt removing the assembly off your good motor to check if everything is keyed properly. One positive is the motor was rebuilt so bolt was off recently. 

 
I wanted to update this, I took a break from it to clear my head and finish another bike I was working on. Came back to it and broke it down, sheared key, replaced the points and ended up getting her running. My Yamalube pump is working like a champ, so now it’s time to do the paint and wheels! Appreciate the advice everyone.