On that model 350 the clutches and baskets usually lasted a long time. I think take out the lever that the cable attaches too. You may find that the chamfered lever is warn. Weld up and then make and machine for maximum leverage. Then take the clutch cover off and ensure that the forsaid lever cham pushes the clutch plate out as much as possible. This means you need to shim the end of the rod. In those years we used to put exchange the end bush the rod goes in with one with a lock nut and a worm screw to adjust it as the plates wore. Try the shimming first. It is not so much to get nuetral, but to allow the clutch to disengage the motor when hitting the brakes etc. Great bike and the lightest berg around, just sort the suspension out!