Not a tranny expert but I've heard that's caused by a screw coming loose in the trans. #8 I believe.

Maybe somebody with more in-depth trans knowledge can either confirm or deny. :dunno
aka "grub screw" duck, royal pain in the ass to R&R, BTDT.
BIG thanks to snobum and Ricky G for the following write up procedure pasted below.
I suspected a loose grub screw on the shift fork....which turned out to be the case.
***If you are doing an input spline lubrication; or a clutch job, this will give you some
idea of what is involved. Information on removing the clutch, inspecting components,
replacing the seal,is not included here.This is what someone unfamiliar with the K bike did, in response to my answering him that
I thought there was a good chance it was a loose grub screw on the shift arm. This is the
linkage arm (selector lever) that fits onto the shift shaft (gearchange pedal shaft) (the
steel shaft that the shifting pedal is attached to). In some literature the grub screw is
called an Allen bolt or Allen screw, or a Tapered Grub Screw. Give the bike a good cleaning! Also clean things as you remove them.
Position bike where it can be supported at rear end AND front end from roof members.
Motorcycle on center stand.
Drain gearbox oil.
Remove the rear wheel and the mudguard.
Remove the side covers and the seat. Remove the engine computer.
Radiator overflow reservoir can be lifted up and out of the way...or otherwise secure it.
Remove the battery.
Remove coil and alternator covers if appropriate to model.
Remove the starter motor NOW.
Disconnect connectors for wiring from rear brake light switch, gear position indicator
and speedometer pickup, all located on right of bike just below the rear of the petrol tank.
Remove rear brake caliper, right footpeg mount and rear brake fluid reservoir all as a
connected unit.
Remove exhaust. Remove left footpeg mount.
Slacken off top and bottom bolts of rear shock, allowing some lateral movement at each
end, but leave attached for the moment. Tie (rope?) swing arm to top of frame to
prevent it falling later when the bottom of the rear shock is disconnected. This is important to
prevent damage to swing arm boot.
Remove final drive with speedo impulse transmitter in place (prevents oil spilling out).
After it's unbolted and out of the swing arm, then remove from rear shock. The shock
supporting it during removal is helpful. The support rope on the swing arm
should stop it moving downwards. You don't need to pull the drive
shaft, as you're about to take the swing arm off.
Undo and remove right (fixed) swing arm pivot stub (three bolts), then the left
adjustable one. Undo support rope from swing arm, keeping it level, and pull back over drive shaft.
Pull out the drive shaft (a sharp tug straight backwards).
Remove clutch cable from release lever and extract it from the gearbox case (rubber boot
needs firm pulling, hold it close to where it's being held back by the case to minimise
chance of tearing it). Take out all of the clutch release mechanism components,
including the long rod that runs directly inward through the gearbox.
Support the bike from either below or above at the rear of the frame AND somewhere at
the front, perhaps the handlebars. Raise the bike with a floor jack (or 2 small jacks, side
by side - which is more stable than one small one) under a block of wood under the sump so
that the center stand is a couple of inches above the floor. Make sure the other supports are tight and in place.
Remove the stand assembly.
Remove bottom 2 bolts attaching gearbox to engine and replace with M8 threaded rods, 6"
long on the left, 4" long on the right (he had to cut 2 inches off the right 6" one to
allow clearance to remove the gearbox). These support the box as you take it off, and
more importantly guide it back in place as you put it back on. Remove the rest of the
bolts, give the box a few gentle taps, and then pull it backwards and it should slide
back over the two supports you installed.
After wiping off any grime from the gear box, remove the neutral detent plug and tip out
the spring and ball bearing behind it. He said there was no need to remove the gear
position switch, as far as he could tell.
Place the gearbox on a well-lit work bench with the front cover facing up. Some
residual gear oil is likely to drain out of the gearbox as you rotate it. Remove all of
the retaining bolts,(snowbum says to heat the cover!),
give the cover a few taps with a soft hammer and GENTLY pry the cover
up, working your way around it and raising each point bit by bit. There are a couple of
protrusions just under the cover on the case that act as good leverage points without
having to touch the mating surfaces to start you off. As you lift the cover off, you
may find that some of the internal shafts are stuck in their recesses on the cover, so raise
it carefully and vertically so that these remain in their correct horizontal positions,
reach under and pull them down if you can.
Be careful that you identify the positions of any shims that come loose so you know
where they belong. He stored them in the recesses on the cover where they came from, and the
residual oil kept them in place. He had to restore a shaft downward to its original
position, which required a bit of jiggling of the pieces that surrounded it in order to
get it back in to place.
In order to get an allen key to the grub screw (at least for replacing it anyway)
you're going to have to remove the gear selector mechanism. There's a rod that supports
it that has to be removed via the breather hole, which means removing the plug and
breather hole sleeve. "The latter was quite stubborn, and required quite a bit of firm
tapping with the handle end of a screwdriver. The support rod (which is retained by a
circlip that has to be removed) was also stubborn, and required a lot of tugging and
persuading. Sliding the selector mechanism claw backward and forward along the
retaining rod seemed to allow small adjustment of the rod's angle, which seemed to help."
Once out, the gear selector mechanism lifts out easily, and you can access the grub
screw easily. Remove, clean with degreaser, dry, Loctite it and tighten it up FIRMLY. Youdon't want to have to do all of this again!
OK, time for reassembly.
Replace the gear selector mechanism, breather sleeve and plug. On the inside of the
cover is a "detent roller arm" that needs to be held back against its spring as you replace
the cover.
This can be achieved by using a bit of the M8 rod left over from making the
gearbox return guides described previously, and hacksawing or grinding slightly less
than half of its end off to form a flat surface parallel to its longitudinal axis, about 8 mm
long should be fine. Gently tap out the locking plug from the inside of the cover (He
used a nail punch) pull back the detent roller arm and insert the rod you've manufactured
from the outside, so that its flat rests against the arm and holds it in place.
Place the cover in the correct position and ensure that the input and output shafts are
turning as they should. Remove the cover again, being careful about shafts and shims as
before.
Thoroughly clean the cover and case mating surfaces. He used a silicon gasket sealant
here, a 3mm bead all the way around and around the bolt holes. Screw down on the cover
until the sealant appears at the edge, then move on to the next screw. Upon returning
to the starting point I found that the 1st two bolts needed a little tightening just to
remove slack. Let sit for an hour, longer if cool, then tighten each bolt about a
quarter of a turn. (Snowbum says to use a cross-pattern, and tighten only a bit at a time)
Remove your manufactured rod and listen for the neutral detent arm snap into place.
Replace the locking plug with a gentle tap. Replace the ball bearing, spring and
neutral detent plug.
Clean and lube all of the splines - output from the engine, input and output shafts of
the gearbox, both ends of the drive shaft, and the final drive.
Slide the gearbox along the guides left in the bottom bolt holes into the engine
housing,replace the other bolts, remove the guides and replace the corresponding bolts, then tighten them all.
Replace the stand assembly and lower the bike so it's supported on its stand and front
wheel.
Replace and adjust all of the clutch bits and pieces.
Replace the swing arm, replacing the support rope and ensuring the boot is in place as
you do. "I got the correct torque on the adjustable pivot stub (done after the fixed one on
the right) by tightening it quite hard by hand, loosening it back off, then tightening
it to the point where there was no play in the swing arm except around the axis of its
pivots, with no detectable friction. Then tighten on the lock nut, holding the pivot
stub in position as with an allen key as you do."
"(The inside face of my fixed pivot stub was scored from the universal joint of the
drive shaft, so I was careful to replace it in the same alignment so as not to create further scoring)."
Push the driveshaft into the pivot arm. Quite tricky for me, as the universal joint is
slightly larger than the swing arm rear opening, so jiggling and persuasion with a block
of wood and hammer were required. Getting the front of the drive shaft onto the gearbox
output shaft also took a fair bit of jiggling, raising the rear of the swing arm
slightly above horizontal seemed to help. Once in place, knock the drive shaft home with the
block of wood and hammer (not too hard) and test to see if home by tugging it backwards.
Reattach the final drive to the bottom of the shock absorber to use it as a support
while guiding it into position at the back of the swing arm. Bolt together. Clean the rear
brake disc with a clean rag and spirits to prevent the brake pads from being
contaminated by any stray oil or grease.
Tighten rear shock mounting points bolts.
Replace the left and right footpeg rests along with the entire rear brake mechanism,
including caliper and reservoir. Give the pedal a few pumps to get the pads into
position, assuming you pried them apart to replace the caliper.
Replace the starter motor and battery.
Replace the exhaust.
Replace the rear cowling, brake light, and mudguard.
Replace the rear wheel. I hope you still have its spacer?
Reattach all wiring and connectors.
Replace the gearbox oil!
Replace the coil and alternator covers and side covers.
Perform a standard pre-ride check.