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I would change the oil, a previous owner may have put in friction modified oil. That is not designed for wet clutches.
The wear on the countershaft can really only be seen when the sprocket is taken off. There is supposed to be an O ring on the inside of the sprocket, it may be missing on your bike. It goes in a groove on the countershaft.
I have a short article here on what I did to my bike to get rid of the circlip problem.
My friend who I bought the bike off had the front sprocket fall off one time. When I got the bike the circlip would regularly bend as the sprocket moved in and out. So I drilled , tapped and fitted a stud into the countershaft to allow a nut to hold the sprocket on.
BMW became aware that the circlip was a dud idea and changed to a threaded countershaft and nut in 1997.
Good luck
Pete
Hi and my first post on this forum as I am thinking of buying a 1995 Funduro. Did you document or video the procedure for curing the circlip problem by drilling and tapping to add a nut?

Apart from the circlip and head bearings they seem virtually un breakable.

Cheers

EDIT: I see now after reading again that I should find it on here, thanks
 
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