Rancher 350 neutral light always on in every gear

Hi guys, Working on a 2000 350 Rancher manual shift only, that came in with an odd condition. It felt to be stuck between possibly high gear and neutral (neutral light on but wont roll forward and takes off when you get it started). Start it up and it acted as if its in gear but the neutral light is always on. I pulled the front case and found a broken shifter paw, replaced that and checked both clutches. Everything looked to be reusable all were at or above the minimum spec so at the very least it should operate this way. I started the bike up and dropped it into 1st gear. it felt and sounded as if it shifted in to gear but the green neutral light was still on and no forward motion. The trans feels as if it shifts up and down through the gears through neutral and into reverse, it jumps lightly back and feels engaged in reveres but the neutral light remains and no red reverse indicator. It almost feels like a bad clutch but I cant understand why does the neutral light is always on. what controls the neutral safety? could there also be a shifter drum issue?