SM_Master,
I had this same problem and this is what was required to fix it. I had to remove the slave cylinder from the bike where it attaches to the engine next to the counter shaft sprocket. There are three allen screws holding it to the engine. Remove the screws and pull the slave cylinder away from the bike. Now remove the piston from the cylinder taking care not to lose the small spring inside. Clean(replace if needed) the o-ring that forms the seal for the piston and refit. Also clean the sealing o-rings that mate the slave to the engine case. This is also a good time to flush the old juice from the system and clean everything up. Once done cleaning everything it's now time to reassemble. First, with the slave cylinder horizontal to the ground, fill the slave cylinder reservoir with new fluid so that it just begins to crest at the top. Next, place the piston back into the cylinder, make sure the spring is not forgotten, and try to keep any air from being trapped in the oil filled chamber. Place the piston on top and press it down into the cylinder with your thumbs, taking care not to damage the o-ring, but forcing the oil back up the hydraulic line towards the master cylinder. As the fluid moves up the line you may have to open the clutch lever to allow the built up pressure to escape into the master cylinder; this is done by pushing the clutch lever away from the handlebars (you normally pull the clutch lever in to disengage the clutch). I wedged a piece of wood in between the bars and the lever to hold it open. If at this point you are having problems, adjust the red plastic finger nut on the clutch lever at the master cylinder all the way in or all the way out. I believe you turn it all the way clockwise but I can't remember for sure.... As you are forcing the fluid back up the line, hold the slave cylinder as low as possible below the master cylinder but so that the hydraulic line entering the slave is at it's highest point, this is to allow any air bubbles to float upwards threw the system and not get trapped in the piston chamber. Once the o-ring of the piston is back into the slave cylinder, knock the piece of wood out from the clutch lever allowing it to relax back into its normal position. At this point you are ready to bolt the slave back onto the bike. Still holding the piston in place with your fingers, slap the slave into its mounting position against the engine. While holding the slave in position with some tension, replace the three allen head screws torquing them all into place. Now you should be ready to bleed the remainder of the line with fluid. Bleed from the bottom of the system (zerk type fitting on the slave) back up into the master cylinder. I used a hand pump oil can with a clear hose fitted to the nozzle tip to force the fluid up and out threw the master cylinder. I suppose a syringe of some sort would also work if you can get your hands on one. I'm sure you know the rest. Backfill the master cylinder reservoir until almost full and replace the cap and tighten screws. Clean up the mess and you should be good to go.
Tips for best results ..... Keep the line as vertical as possible while bleeding to ensure any trapped air is moving to the highest point which should be the master cylinder.
I hope this mumbo-jumbo makes sense, if you try it and it doesn't work, just post up and we will help you the best we can. Good luck!
Regards,