Page 9-38, second photo starting from the bottom up; Set that shift shaft arm back on the shift pawl as you see by the photo. Air hammer it [29mm] off or yes, you will need to hold the basket as you remove the nut any other way.
But first look at that shift shaft. When that cir-clip is installed, it has a cut and a round edge. The way you install that clip is to have the cut edge dig into the groove, you tip the bike over. That flat part in the groove has less chance of popping over if you had the round side or the clip reversed. So the cut side should face you when installing the clip.
Here is where the eye has to inspect that shaft and how durable that groove is for another round of thrust at it? Look at that one side of the shift shaft's groove, see if it is sheered away? You can't have a warp at the washer. There is a little slop pulling the shaft in and out, but not much, where it would pop over the pawl dogs or the star washer with the nipples.
You have to make sure the tiny spring (C) is pushing the shift arm up that shifts the pawl dogs. Page 9-39, second photo down from the top. You will push that shift shaft against the big clutch outer without the cir-clip in place. This pushed the shift fork or spring loaded arm up and off the shift star.
When you pull the shaft back to install the cir-clip, the spring loaded arm has enough give to rest on the dogs, not sit under the nipples sticking out or the dog bumps. If you can push the floating fork arm back down and under the dog protrusions, there is where you can't shift the gears. There is where you get away without pulling the basket off.
However, lose the spring, then the riveted on fork arm drops down caused by the spring popping off. Again, another way that shift drum cannot move if the shaft is off the shift star.
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