I am not sure my rear wheel was on the bike correctly when I took it apart. Putting it back together there are 2 collars on the sprocket carrier. One looks to go in with the wheel seal, then a duster cover and then the other collar. That seems like the way the parts list shows but not to many threads are used then on the shaft the adjuster etc goes on. Here is a couple pics.  Is this correct?.

Looks good to me looking at the parts in this link. First model DT1 with separate sprocket carrier--great idea that got left behind with the later design.

www.partzilla.com/catalog/yamaha/motorcycle/1968/dt1/rear-wheel

I was concerned about the amount of threads being used on the lock nut for the sprocket carrier. Looks like only 4 or 5 will be used before the nut is tight.

Here’s several photos of how my ‘68 was assembled…

 
 
 
 
 

Maybe this will help.

So how many threads about are being used on the big nut on the carrier collar, hard to see in the pictures.

From memory I believe the nut was fully threaded on the shaft.  Unfortunately all the steel parts are at the plater for fresh zinc otherwise I would have been able to inspect the the axel to confirm.  That said I have attached a first generation scan from one of my parts guides that is clearer than most online schematics.  I hope this helps.

 
 
 

one more photo…

 

Oh yeah sorry, didn't get what you were worried about. So yes not right is it. Spacer too long, but if its original it must be right. Bearing the right one not double width if that's even possible, like a double row bearing. Just seems like the stub axle isn't right home in the bearing!!. Should be a full nut+. Think the main axle nut comes up against the stub not the stub nut.

I got the rear wheel finally mounted and the sprocket carrier nut is about threaded 3/4 of the way on the collar so I think it is good.  Spins good and things line up well.

I just pulled the castleated nut off my DT1B . I had thought the sprocket carrier stub protruded past the carrier nut .
I was wrong , but on mine it is only recessed about 2mm , or a couple of threads .
When yours is tightened up , it will probably be about the same , looking at your pics .

That is about how mine ended up, just a few threads short of being threaded all the way on the carrier axle.