I think the faulty clutch engagement was simply a result of my instinctual caution......... I took the hood off to start the process, and as a force of habit started lubricating any moving parts. After spraying the connection of the rod and Y bracket coming off the clutch, I worked the PTO lever back and forth a few times to get the lube worked all the way around the plastic bushing. As I was doing this, the lever locked forward......... I think I was just not applying enough pressure to get it to "lock" forward, I don't think I ever had it fully engaged. There is definetly a cam feeling, it sort of rocks over a certain spot and then locks in place.
Next question: is the lever on a shaft with a greasable bushing or something similar ? I was out there in the dark with a flashlight and decided it was time to come inside without looking up in there any further.
I still can't understand why the mule drive won't settle down on the lower pins competely. It dry fits just fine, when it's all bolted and pinned together, it's as if the deck is pushing it forward, causing it to slide up off the pins somewhat. If I push back on the front of the mule drive, it sits back down on those pins. I don't think it's possible to re-assemble these pieces incorrectly however. I'll keep working with it, maybe there is something I am missing that is causing it to be in a bind or something similar.
Thanks for the input Tom and Snot, greatly appreciated.