[QUOTE="nitrodog1]I remove cover the barrel and move forks by hand into neutral. Rear wheel is off ground turns freely. Put barrel back on, no neutral rock wheel no neutral wheel turns freely for half revolution then hits something with a solid sound.[/QUOTE]
I am trying brother, believe me I am but I am having some difficulty following. So, if I understand correctly, you remove the shift drum, place the shift forks in neutral and the rear wheel rotates freely, as it should? You should also be able to position the shift forks and put the trans in all the other gears and rotated the rear wheel as well (with spark plugs removed). Of course the wheel will require more effort to rotate but that will verify that the trans is functioning as it should.
Now put the shift drum back in, make sure the shift pawl is adjusted properly and you should be able to see what happens when you manually operate the shift lever to put the trans in neutral. If you can put the trans in neutral that way, the wheel should turn freely as it did without the shift drum in place. If you cannot put the trans in neutral that way, then something is wrong with the drum, shift pawl, shift forks or shift fork rod.
I assume that the trans was functioning properly before you replaced the seals? Which seals did you replace?