after doing a bit of research on the forum, I decided to check the layshaft spacer and bearings, both are still in perfect condition, bearing works fine and the spacer doesn't appear to have any damage at either end. I've looked again closely at the manual to ensure that I haven't made any mistakes, and then re-assembled, but still the problem persists. I even replaced the slipper nut for a new one. When I gently apply throttle whilst hold one of the rear wheels, the spur gear hesitates then starts to rotate, when on the bench gentle throttle does appear to work and both wheels start to move, but when on the ground with load, I just get lots of slip. I'm reluctant to tighten the slipper much more than about 4-5mm in from the end of the screw, tried slowly applying throttle and then turning the screw in until I get bite, but its not tightening. The slipper pads have a slight rub on both sides as I've tried to use both sides of the pads, but they are far from worn, the pads on my 410 are way worse and still perform ok.
I'm completely puzzled at this point, not sure where to go from here and what to try next. ???