noise grinding

Hi everyone! Im new here and new to motorized biking aswell. i recently completed my modern style board racer inspired project with a chinese engine Kit. I was riding and my engine(2stroke 67cc Slanthead) lost power and after 100-150feet it stopped running. It would still rev after i got it...

Right after I swapped out my 44t for a 36t sprocket, without touching anything on the motor....... I go to try out the bike and first off- pretty nice speed. but then when I begin to coast and pull in the clutch, it makes a horrible grinding noise from the motor. If I pull in just a bit...