Do i need a new engine?

My clutch is refusing to work. I have the cable tightened, the ball bearing is where it should be and the bike won't roll (with the clutch pulled in) without compressing the engine. I even tried it without the spark plug, which apparently should make it so it doesn't compress or something...

Basically, Do i have a faulty engine? Or is there something else that is wrong?

Thanks for the help