Noticed the kick start would sometimes not spring back and got caught up near the pegs.

Removed the case cover and the kick assembly and saw that the stop has been wearing the case away.

Has this happened to others? What would you recommended to handle this?

google photos album

Not sure what to make of that as its 'way around' from where the stop on the shaft should get to. Might be wrong.
Shape of the curl wear mark looks like idler gear but can't be as it isn't the large.
That'll get people thinking.
Is the shaft stop broken?.
Still can't see how that would cause anything like that.

I had this problem with my CT3. I bought a new kick axle off ebay and it solved the problem. My understanding is that the kick starter will be allowed to snap back occasionally over the life of the bike. Over time the pressed on lever will move and then it is clocked wrong. I would guess that it can be rotated back but I didn't know how far I had to go to be correct so I just bought a new one.

Cheers

Dam, both of you just blew my mind. I just had it installed incorrectly. fudge

and thanks!

I might be wrong but thought the worst that could happen if the stop broke loose was the kick lever goes forward & hits the cover so you then correct it but does it again until multiples of correcting & the spring tension is lost so won't return. Can we have a pic of your kick shaft & gear with bits n pieces, springy clip etc.