Chain will not stay on rear sprocket

I'm having an odd issue.

This is my second motor bike. Its a Huffy Cranbrook with your standard 2stroke engine on it.

I am using the chain tensioner on this bicycle. When I push the clutch in and roll the bike foward, the chain literally picks up off the rear sprocket teeth and binds up. When I move the bicycle in reverse it works fine and rides back onto the gear properly.

My rear sprocket is tight, my engine is straight inline. Whats the issue?

I also ground down the rear sprocket teeth a little.

every site i checked recommended to file/grind the sprocket slightly to get rid of the tip

I did it from the side. I even just swapped out the Rear gear to a Brand new one this morning.

I was looking at my other motorized bicycling and I noticed I can move the Clutch Arm (the one one on the CHain Side of the engine) by hand when the cable is off. On this new motorized bicycle I CANNOT move the arm by hand, and with a wrench pressing against it I can barely budge it. its extremely difficult to move it with the cable attached as well compared to my other one which has little resistance.

I think my problem is the clutch is too tight and doesn't function smoothly so my chain keeps doing the "Jerks" and comes off the gear. How can I loosen the clutch so it moves more freely? This will not be an adjustment at the Cable, but on the engine itsself.

Venice, yes.

But only problem is with the bicycle assembled, I can barely move the rear wheel now. The clutch is way too stiff I can't even pedal the bicycle with the chain on and no the chain is not bound up.

Venice,

Ok here is what I discovered this evening.

I pulled the cover off the right side of the engine. There was a little bit of fuel in the clutch set (that shouldn't be there correct?). I loosened up the star adjuster nearly an entire turn and now I have a free moving clutch lever! My rear wheel does spin now freely. I did ride the bike for a moment but the chain did slip off down the road.

Now I also own a regular Huffy Cranbrook, brand new, and was riding it this evening. I noticed the rear wheel is WAY WAY Off from being true. I think this is the issue with the one on my Huffy Cranbrook motor bike as well. I'm going to take the rear wheel off and get it tru'd over the weekend when i get time.

I'm also considering getting the Maniac Mechanic rear sprocket adapter & new sprocket because I dont like the sprocket holding onto the spokes. On my other motorbicycle I already have broke spokes with just a few hundred miles on it.