okay I think it is fixed now. The inner part of the flywheel looked worn down and it had a bigger opening now than the new flywheel I just purchased. Now with the clutch nut tightened, the clutch bell will spin without the engine turning over.

I have a few questions
1) should I apply loctite to the clutch nut and screw it on really tight?
2) has anyone else had problems with the flywheel that comes on the x-c? Is there a higher quality flywheel that will fit the x-c?
3) should I apply loctite to the 3 hex screws that hold the pull start in place (they screw into metal but they also go through and touch the plastic pull start case)?