When I shift into gear (both on and off stand) and engage the clutch while in gear I hear clicking sounds coming from near the output shaft. The output shaft seems to "jump" for lack of a better term. Its not a consistent thing with rpm and if I spin the transmission with the clutch plates removed I can't hear it while in gear. I have inspected the clutch basket and plates and all is good there. I have a new chain and sprocket kit. The noise and jumpy-ness is also there with or without the chain on. The clicking usually starts around engaging the clutch 25% and continues even to 100% engaged.

Symptoms
-Clicking noises near output shaft
-Jumpy/jerky output shaft
-Consistent in all gears (except neutral)

When it happens
-any rpm
-in any gear (except neutral) with at least 25% clutch engagement
-seems to happen whenever, not consistent with a certain spot on the output shaft
-with or without load on the output shaft (chain on/off, bike on or off stand)

What I have tried
-Inspecting clutch plates and basket for grooves (Minor grooves, but nothing to write home about, seen worse, bike has 24,000 km on it)
-new sprockets and chain (rebuilding the bike, as its a project bike)
-Tried in every gear while on stand
-Tried in first and second off stand

Any help/ideas is greatly appreciated, I believe I'll be splitting the engine apart to fix it, but would like some suggestions on what to look for before I go too far.

Thanks in advanced for any help.