Re-RE-RE built the tranny again. The clutch finger moves in and out of the housing when spun (I Chucked the shaft in my drill to test it out of the transmission). When I put everything back together and went to run again and it still was stuck in 1st. I'm just going to buy a new 2-speed mechanism and be done with it.
To answer your other 2 questions, the slipper is locked to eliminate that from being a problem, and the engine is running perfect. I love this Sirio .18

Big Smoke