Usually this sort of trouble comes from the pull rod teeth not being either lined up, or engaged with the teeth on the release arm shaft. If not correctly aligned and with the teeth meshing the clutch will not disengage and there will be loads of slack at the handlebar lever.

Remove the cover. Rotate the pull rod so the teeth on the end are facing toward the rear of the bike. Fit the cover making sure the release arm is pointing rewards parallel to the side of the bike ( ignore the punch marks at this point). If the pull rod teeth and release arm teeth are meshing correctly you will notice the release arm move clockwise as the cover is slid into place.

Once fitted you can then push the release arm as far forward as it'll go with your finger and at that point the index marks on the casing and release arm should line up. If they don't then remove the cover and rotate the release arm shaft (not the pull rod) by how ever much short or over the index markings you are.

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