It could be that a fix might be as simple as adding some material to the "stop" area to keep the lever from swinging past where the foot lever is perpendicular to the centerline of the bike.  Not sure it would be enough but would help.

As the lever end rotates past 90 degrees it gets closer to the frame.  Plus it looks like your foot would tend to slide off when kicking. 

A good shop may be able to build up and repair the swivel joint and stop...  or could be done at home if you are handy with a welder and grinding tools.

 




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Just to throw some more fuel on the fire, about a year ago I was parting out a 1976 DT250C, a local guy wanted to look at the bike, he came over and wanted a few small parts, he had what he called a 100% original DT250C that he bought from Marbles Motors, he wanted to buy the nut that holds on the rh side foot peg as his was damaged by the kick starter lever hitting it, well the bike I was parting also had that nut damaged by what appears to be the kick start lever hitting it as well, we compared his kick start lever from pictures he had on his cell phone to the parts bike and at the time (2) DT400C’s I had, one of the DT400’s also had the nut damaged and one DT400 did not.

I also have a 1976 DT250C with only 670 miles on it that I am the second owner and have owned since 1976 the foot peg nut was not damaged on that bike, after we looked at my (2) DT250C’s & DT400C’s all the kick start levers looked identical only difference being sloppiness in the knuckle part corresponding with the higher mileage more ragged bikes. My guess is the sloppiness is in the knuckle? Also after he showed me pictures of his $9500.00 100% original bike and I pointed out 5-6 items that were incorrect just from cell phone pictures he was a little bummed out, I ended up just giving him the few parts he wanted, I felt bad for him after he told me what the bike cost him.

Mark I think your right on your guess. I took the lever off now to see what I can do with it

the tag that hits the boss was missing on the kick start so a blob ow weld has brought the kick start at 90 deg and only just catching now so some fettling with the angle grinder should sort it out, rode the bike today, had a back kick back and done my ancle in on it. I find I need 6 to 8 kicks to get it going even with a rex ignition on it, so all the original stock ignition I took off appears now to be ok my original issue was overhanging when de acellarating that turned out to be a carb issue not an ignition 1