thanks all
yes advance held open to time but am going to let a mech time it once new basket installed anyways will check my work on that one then (would the points be too far past the "window" on the stator if advance not held open?)
the kick gear retracts fine clutch cover off
however the spring that sits in the recess had come loose which might explain it fouling the pri driven gear
as usual i fear i may be chasing more than one issue simultaneously, timing and mechanical, the first time it bumped and ran fine it was only after reassembly to look at the sticky clutch the kick gear caused an issue
but then it has been kicking back on kick start for a while before this latest issue
confusing as when it runs it runs well, idles and pulls well, not too much smoke i would expect a timing issue to be present in running?

here is a vid of it running post rebuild for reference imgur.com/a/OIAk9PM
this is prior to it shearing the pri driven gear on a random not kicking back kick start 

Something isn't making sense.  If the friction clip has come loose, the kick start gear simply won't engage unless someone has done some creative repairs at some point?  (I've seen someone add a spring under the gear)

Also, if the engine is rotating in the normal direction, the kick gear at the starter will be pushed away from engaging by the helical splines...  engine would have to rotate backwards somehow (kick back or started backwards) to engage the starter and break the gear. 

(Pretty sure that year 175 originally had a diode in the ignition circuit to the coil to prevent backwards starting)

At this point we can only guess.  Posting pictures and video to a third party site (Imgur/YouTube) showing your parts and the operation of the kick starter with cover off is pretty much necessary for anyone to help at this point. 

ok yes will post up the kick mech vid while clutch cover is off but it all seems to be functioning properly with the cover off at least
will have to investigate the mysterious diode
J

They sound funny if they start backwards.  When I was a kid, my friend bump started his bike, barely caught, but started.  He promptly revved it and dumped the clutch to pop a wheelie.  Bike shot backwards and he went over the bars.  Engine had started backwards. Funny as hell, especially since he was trying to be all cool and impress us.

It's not common at all for them to start backwards.  Don't waste too much time investigating...  something must be wrong in the kick start area because gear would not catch when running backwards unless someone pushed down on the kick lever to engage the gear while it was running backwards.  Diode is usually in the black wire right where the stator plugs into the main harness... OR the diode is inside the ignition coil where the wire black wire connects.  (I'm pretty sure in 76, it was inside the coil...  earlier models, 74,75, had it in the harness.)

Kick tension clip can't escape if fitted in the groove in the first place. In saying that & without researching just now, if there's a limiting stop like circlip or two half circles that are missing or damaged then can the gear come out further than it should so clip escapes the guiding groove then gear won't return out of the way. Ignore me I'll update myself later today & read all above.

imgur.com/a/Tk4C8G8

to confirm my methodology on timing
the manual states 4 revolutions clockwise on the dial gauge BTDC
i have been finding TDC and then back 1.8mm to BTDC for points opening
i dont fully get the 4 revolutions part in section 7?
chars
D

imgur.com/a/mvw9jlI

kick in action
and pics
imgur.com/a/pOGxFZf

imgur.com/a/2uoVWUu

The manual description on timing is simply advising you to turn the flywheel "backwards" (clockwise) beyond 1.8mm...  (if one revolution = 1mm on the Yamaha dial indicator then approximately 4 revolutions equals approximately 4mm BTDC.)

Then you rotate the flywheel forward (counter-clockwise) until you reach 1.8mm BTDC...  in other words, it's best to be rotating the engine forward when finding 1.8mm BTDC.

Thanks again 
it's back together and kick retracting 
new pri driven clutch basket 
will get it timed by a mech just to check my work 
and report back 

Finding a mechanic in this day & age familiar with these old girls might be a problem. I'd say your doing ok on timing from your description.