Hi Twolanerider,
Three pictures up you can see the bearing seized at the end of the lever and caused the grove damage. What I cannot post because it is too big is a video of the lever action. I can move the lever about a 1/4 inch before the hydraulic is actuated, so they are replacing the master cylinder based on the damage and the lever video. So I am losing some travel based on the two pictures above. I agree with you that .73 is above the spec, but because of the reverse gear I need it to be as much as I can get, so if I can get it to the same or more distance as me wife's bike then the transmission will not grind with putting it in reverse. Also I have been noticing that the bike does creep forward when in gear and the clutch is in. I put in the reverse because I cannot more the bike back with it in gear and clutch pulled in, if the clutch worked properly, i probably would not have put in the new gear.
David