Corgi1 has a good point. If the clutch actuator arm is raised up out of the cover it would not allow for proper orientation of the pin and the cam inside the cover. There would be interference that will give you the problem you're having. Check the height of the actuator arm from the cover. It should be nearly flush. There is a pin inside the cover that keeps the arm in place but it is common for the pin to fall out which will allow the arm to lift out. Check this and get back to us. Even so, it appears from your photo that the pin protrudes further than it should. Is there any chance that there could be something in the hole in the sprocket other than the ball and pin? No extra parts? Any kids around that might be 'helping' mom put the engine together
I had a friend who found the fuel line on his hot rod plugged with a flat head screw his 5 year old had helpfully dropped inside the tank when dad wasn't watching.