Is this clutch worn out????

The clutch pads look like they have a greasy coating. Possibly from over lubrication of the gears or a leaking crankcase seal behind the primary gear, right side. You could try cleaning the friction pads using brake cleaner (wear eye protection) and drying with compressed air.

Even if the clutch is worn or grease soaked it won't cause the engine to "lock up". If the crankshaft won't turn you have bigger problems. Since you didn't see anything suspicious in the cylinder then you might be looking at a problem with the crank or connecting rod bearings.

Have you tried removing the spark plug and rotating the crankshaft by the magneto rotor nut?
Are you sure the chain isn't bound up on the drive sprocket? A chain that is too loose can do that and lock the rear wheel. You didn't say what you mean by "it locked up". Rear wheel or engine?

Tom