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24,000 miles it's still a pup.
I can't believe the gears or shift forks are trashed all ready.
I'd put my money on the circlip coming off.
On my bike the shift rod had fell out of position but still shifted, but when I'd hammer 2nd it would pop out of gear
I think I had about that many miles on my 78 kz1000 at the time.
I wonder if the shift rods are the same type, from a bad batch.
What ever the problem is, I recommend you pull the motor and split the case and have a look before it screws something else up.
It isn't that bad to do I think I took it out one night and put it back together the next( I had a buddy help me) and hopefully all you'll need is that groove cut deeper and a new gasket.
Good luck and keep us posted. JD

it could be a combo of the forks and the dogs, Oh and lets not forget the circlip.
any ways.u may be able to pull the pan and have a look see. u can pull the fork rod out and inspect it's groove, and the forks without pulling the motor.
u should be able to see enough of the dogs on the 2nd gears, from underneeth, to tell how bad they are.
if bad u should be able to find a good used trany cheap.