Kevin, when you spin whatever it is you spin on your ped to try to start it, does the nut in the middle of the three clutch pads move at all?
I was thinking earlier that the clutch we see was just for forward proplulsion and not for starting. I could easily have been wrong not knowing your ped. Is there a clutch cable you pull to engage then engine after you have the back wheel spinning. Can you move it and watch the clutch pads at the same time? Do they move out to the inside of the blue circle piece?
I agree with joew about the blue color. Not good news. But not fatal, I'm thinking. Can you see any lining on the three clutch pads? It should look like brake lining