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Tomorrow is Doo Day. EM parts in hand. Getting the bike ready, drained the oil..Check, replaced oil filter..check. Oil Drain Plug and oil filter cap torqued and on..check. Removed fron sprocket cover.

Got ready to remove gear shifter...do I place it in neutral or do I leave it in first gear? Thanks.

Should have added 2008, and I am doing this with the bike on the kickstand if that makes any difference.
 

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D C,
Leave the bike in Neutral. I like to do this job, with the engine at Top Dead Center. You will be turning the engine Forward and Backwards some.
The wood-ruff key is at TDC. Use a light 'center-punch' mark on one SIDE of the KEY, (note, I said KEY! not crank!) to make it Stay in the Groove, as you put things back Together.


Also, you will find the whole job Easier, if you lean the bike to the Right, against a wall or even farther over, with RH handlebar on a Saw-horse.
 

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Take that advice on leaning it over.

One issue, particularly when on the side stand, when the inner cover is off, and the lever spring is removed, it's possible for the adjuster shaft to slide out enough for the rear spacer washer to slip off and drop into the crankcase. Sometimes without you even realizing it. This can also happen even level or tipped but less likely. I hold my finger on the shaft so it stays in place as I remove the adjuster.
 
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