Just put one together today. Mine didn't want to freewheel either. I thought it was a clutch issue at first, but realized the chain was contacting the front side of the cover (between the sprocket and the magneto cover). I had to clearance the cover with a grinder.
hey, make sure your clutch cover is on tight too. otherwise the cam won't push the clutch in far enough to disengage.
it's easy to overlook something simple while trying to troubleshoot. ive done it myself more times than id like to admit.