Burn out clutch while starting?

I did a complete tear down on an engine, that had a blown rod. Completely rebuilt to stock spec. I've rebuilt many engine in my day. But this is eluding me.

When starting the bike, I'm getting spark, fuel, compression, no tapping noises, everything checks out.

However, it made a sound, almost like a chain rubbing on a frame (I checked the timing chain)
Tried to start it again, and it made that sound again.

Now it isn't a consistent noise, its more like a once in a while.
However, it than made a noise that sounds like (pffffffttttt) no pop, nothing. Than smoke from my clutch basket.

Could the chain rubbing noise been my clutch plates? and the pffffftt be them crapping out completely?

I took the clutch cover off, and the plates don't smell burnt, but I still need to measure them.

Or is it something more internal?

This is my last resort before trailering it 2 hours to the closest Suzuki Dealer.
 
Did you pull the clutch basket back out? Did you make sure the basket is sitting correctly on the shaft and that the gear on the back of it is engaging the oil pump?
 
Justin,

I pulled the basket, and rechecked everything. Oil pump flows smooth. The basket and gear is grabbing it properly. I had some discoloration on the steel clutch plates, so I am putting a new clutch in. Nothing smells burnt though. I drained oil, and it came out fine, with no particles.
 
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