First, I don’t claim to know a lot about the DXL clutch. Have you checked the clearance between the friction and floater disks? It appears that you have enough end play. Pull the spark plug and rock the rear wheels. If the piston moves, the clutch is engaging. Assuming that the clutch and rear gears are in line. And you could try installing the clutch without the key. Other than that, hopefully someone knowledgeable will chime in or you could call Hosrtman.
Word of advice, used the Horstman clutch tools to remove and install the clutch.
LAD Specialties customer / tony kart / rotax / kt100