Do you have the cases split? Once the cases are apart you should be able to remove the shift forks and drum, the circli[p they are referring to is on the r/h side of the output shaft. Once you have the drum/forks out of the way, both shafts should lift out of the case as an assembly.

 

Thanks GB
Yeah, cases are split, shift forks and drum have been removed.
I failed to remember that there is a collar that sits behind the front sprocket. That sucker is rusted in place and I believe my problem.
Working on freeing it up, so I can get it off. I suspect a circlip behind that but maybe not.

 

For those following along at home and wondering about costs....
So far I have three parts orders.
The crank is/was $428 with a 10% off coupon.
The bits and pieces part order, which included things most "normally treated" motorcycles wouldn't need, was $484 and so far has only 3 items back ordered.
Those three items also have no delivery date and could be back ordered for quite a while.
Two of those I consider really important. One is the carb holder, the other is the carb to air box boot. Mine appear OK but I'd like new ones because mine have been exposed to crazy temperature changes. They've cycled through full operating temps to -30F many times within hours, only to have it happen the next day all over again.
My last (current and definitely not the last) one is bearings and cam cover bolts. It stands at $195.
Add in Bill Blue's 351 for $540 and I'm up to $1647.
Actually that's not bad for a brand new motor. Used motors were in that range for a stock 250, which this won't be.
So far the best new tool added to my collection was the impact screwdriver.
Soon I will try the greasy rag trick on the blind bearing in the case. Hopefully it works. Here's a link to the greasy rag trick :

 

AvE is great^
Also seen that done with white bread!

Thanks for the update.

 

Once you are done I would be curious to hear your thoughts on the rebuild vs. buying a low mileage bike and parting yours out. I can think of some obvious advantages and disadvantages to either option, but you will have a perspective that most of us will never have.

 

The way I see it is who cares what it cost! You enjoy the bike and when done you will know exactly what you have.

Good luck with your build!

 

So I haven't had much luck getting the transmission out because of a part rusted on the outside the case. The part is behind the front sprocket and inside the oil seal. What I'm talking about can be seen in the manual (section 5-2 exploded view of the left side), it's the part between the sprocket and the part with the letter G.
I've spent a bunch of time soaking it with PB and picking out rust from between the collar and the driveshaft. I've also given it a few taps with a punch.
I'm going to have to step up my game because the first box of parts arrived today.

 

I'm pretty sure that the countershaft should be able to be knocked out of the case with the bearing. I would attempt to do this and then see if that will give you enough access to the spacer to get it off. Use a brass drift or a block of aluminum to prevent any damage to the shaft when smacking it.

 

Thanks GB, I'll give that a try. My other thought was air chiseling that sucker off the shaft.
Well I've found a few more holes in the frame while removing some rust spots. Going to take it to a real fabricator and get some repair suggestions(like should I patch or replace frame tubes kind of advice).
My crank has finally shipped almost 3 weeks after ordering it.
Now just waiting on bearings to ship.

 

Max, funny thing on the replacement of some of your rubber parts like manifold and airbox boot. I have a 36-pumper in my '06 with original airbox boot. Over time I've had a harder time getting my boot to mate up and clamp to the intake mouth of the carb...like it was too short. Nothing is loose or broken...like airbox mount, frame, or engine mounts are all good. The boot was still supple and not damaged. I ordered a new airbox boot for grins. Wow!...the original boot was at least 1/2" shorter. I know these kinds of parts can get hard and stiff, but in my case the original boot had literally shrunk but was still supple. Anyway, the new boot fits up nicely to the carb now with plenty of clamping interface. After that many miles it's probably wise to replace the manifold and boot like you're doing regardless of how they "look".