Be sure the chain size matches both the engine sprocket and the axle sprocket( 219 or #35 ). Does the engine sprocket spin freely with the chain removed? If the clutch sprocket dose not spin freely then check the spacer that is located between the engine and the clutch drum. They come in different thicknesses and diameters. A 10 tooth drum uses a smaller diameter spacer compared to an 11 tooth sprocket.
Be sure the chain links move freely and do not kink. Check the axle sprocket to clutch sprocket alignment.