Moped Army

This is the engine Smitty built for me. I was riding it on its second ride since getting the new kit and everything was fine, but then I lost all torque to the rear wheel. The engine was running fine and responding to the throttle, but the 'ped wasn't moving, regardless of how much I revved the engine. After turning the engine off, I tried to restart it and diagnosed it as a clutch problem because when I pulled in the clutch lever the piston did not move. (I.e. - clutch not engaging).

Went home, removed clutch cover and the "bell" thingy that compresses against the clutch parts to engage the clutch when you pull the clutch lever. Upon removing the "bell", I discovered that the nut underneath it was completely loose and just kind of resting inside the bell. Thinking I had found the problem, I cleaned all transmission fluid from the nut and the end of the bolt using a paper towel sprayed with brake cleaner. I went out and bought some blue loctite (this is what the manual recommends) and applied it to the nut and tightened the nut back onto the bolt. I don't have a torque wrench, so I can't be sure that I tightened it to the specified 35lb/ft, but needless to say I think I got it pretty damn tight. I used a wrench to hold the washer so I could tighten the nut down good.

I put it all back together, filled it with tranny fluid and went to try it out. Now, when I pull in the clutch lever the piston moves and the engine starts, but I still don't have any torque to the rear wheel - none whatsoever. In other words, now the clutch engages enough to start the engine, but not enough to move the 'ped. Went home, thinking I had not tightened the nut enough, and pissed that I was going to have to open the damn tranny again and drain all the fluid out again. I took off the clutch cover again and removed the "bell" thingy, only to find that the nut was still securely tightened against the clutch parts, and not the slightest bit loose. I'm not even sure that I could tighten it more, although I did not try, since it has loctite on it now anyway.

Rather than remove the nut and start digging deeper, I wanted to see what people think the problem might be.

So now, what do I do? Is something else inside the clutch still slipping or loose? All I know is that it's not the nut on the outside. I know somebody is going to suggest repacing the clutch friction disks, but I don't think that is the problem (unless they were somehow worn out during the time that I was revving the engine and getting no response from the 'ped) because Smitty said they were in good shape, and from all I can tell they were working fine right up until the moment I lost all torque/acceleration. Another reason I don't think it's the friction disks is because I get no torque/acceleration whatsoever, whereas I would expect to get at least a little bit of torque if the disks were just worn out.

A specific question I have is: when the nut came all the way off, could that have allowed something in the clutch assembly to slip out of position, and then when I re-installed the nut I didn't really fix the problem because I didn't go deep enough and make sure everything was still seated where it was supposed to be? I don't know enough about the clutch to know whether that is a possibility.

Please help me get this 'ped running again. It has a brand new kit on it and I have spent considerable time re-building it.