Hi Festing,
I don't feel there's that much wrong there apart from a bit of adjustment and lubrication issues.
Your black plastic thrust pad is on it's way out and should be replaced on rebuild, but most of it is in your lever adjustment.
You mention a fair amount of free play in the lever, well that's it. You have to adjust the set screw in the fork assembly so that there is about half a millimetre of play between the clutch fork and the thrust pad. This will then take out the excessive amount of slack in the lever and push the clutch cone further inwards, thus no chance of it grabbing. The flat part is designed to be there but put a dob of grease on the contact points where you can see shiny metal.
Also while we are working in the same area I would check to see if the two square headed set screws that pin the clutch body to the engines PTO shaft are nice and tight.
See how you go and get back to us.
Also a bit of an observation and that is the clutch half should be a bit closer to the engine, about two to three millimetre clearance.
BTW thanks for the photos.
Cheers,
BB.
