so the shaft of the alternator will push out and engage? theres really only one way to wire it as the case of the alternator is the ground (earthing) and the cable attaches directly to the starter relay

 

I thought it was the starter you were having problems with.....now I'M confused

 

Not the alternator, the starter motor......the small gear has to retract when the bike fires or it would be continuously engaged with the flywheel, which would mean when the bike's doing 10000RPM, the starter will be going at about 50000RPM......as mentioned above, not a good thing.
If you have the starter on a bench, and power it up, you should get a click as the pinion gear pops out ( which is when it would engage with the flywheel when the starter's in the bike, and turn the engine over.
If you've ever tried to start a car that's already running, you'd hear a clang, which is the starter motor trying to engage a flywheel that's moving....also not a good thing......
Maybe your best option is to take the starter to someone who knows how they work in your bike (better than I do) and ask them to check it - will take them about 5 minutes and cost little to nothing, then you'll know exactly whether it's the starter, or something else is at fault.
Best I can do from here........
Can't be the alternator(stator) Gill, I think he's a little confused......

 

my apologies i meant starter. when i bench tested the sarter it spun with some great force however the pinion did not ever "pop" out. I will have to check this.

 

Hi the starter will be all right, there is no bendix to pop out as it is a constant drive. There is a clutch for the starter on the alternator shaft so the starter is not driven all the time. The two things it can be is this clutch or the chain from the crank. If your engine is turning freely you can check which it is by bump starting the bike and check to see if it is charging, if it is your chain is ok.