Just got this bike running after restoring. The clutch was slipping bad. Pulled clutch out and all the discs had wear. I replaced with new clutch discs, measured the springs (in spec) adjusted the rod and reassembled. It is now better, but still slips. I noticed while doing the job that the clutch housing will shift on its hub if I hold it tight in my hand and twist it. Is that normal? Looking for advise on why it may still be slipping?

Just checking that it's wet clutch compatible oil being used?

Using Yamalube 10/30 I believe

Should be just fine then. How much release are you getting from the clutch? My CT2 needed new plates and springs when purchased, now it's it adjusted to where you can feel it drag if the bike not running and is being pushed in gear with the clutch in, yet the bike won't move when running and in gear with the clutch in - but just barely if that makes sense. If it's been sitting for some time it won't always move when not running and pushed in gear with the clutch in.

Found it was a pretty fine line of adjustment to hit the magic spot between the clutch completely disengaging, and slipping, or just barely disengaging and not slipping (and maybe that's just because it still has the original clutch cable on it). So of course ymmv.

If you put new plates in i hope you left those 5 rubber rings out as can make an old slipping clutch worse, but wouldn't affect new plates. So i think measure the stacked plates with steels to see if measure less than the old ones. If they 'do', then see if the end pressure plate is touching the overhang of the clutch hub so it's only 'just' lightly compressing the plates. In an extreme case maybe the mushroom that pushes the pressure plate could be running out of room & trapped back against the end of the main shaft with no clearance--doubt it though. Gotta have clearance on the adjuster on the left but think you said that was ok.

I put in new friction discs and reused the metal plates and rubber rings. I measured two of the springs and they were in spec, so I lined them all up together and they were all the same height. I have adjusted on the left various ways, with little free play and with lots of free play and with no free play. I have it set now as per manual. Can the springs mic out and still be weak?

Beyond my experience here as my springs were just under spec when measured with calipers. I'd try taking out those rubber rings and see how things go...I bet you're getting pretty fast and getting that cover off these days!

While having it out, worth measuring the metal plates, maybe they have more wear than normal and are too thin too.

I have had that side case off 3 times LOL, yes getting pretty good at it. how do the rubber rings create slippage? Do they swell?

That's above my pay grade, but they are there to help the clutch be smoother so I guess in that aspect?

The rubber rings are there to help spread between the friction plates and steels .
I usually just replace the springs . They aren't terribly expensive and have usually
sacked out some .
If your old clutch had been slipping badly for some time your steel plates could be glazed .
If they aren't warped , but are discoloured , a shot of bead blasting gives the frictions
something to bite onto . If you do go down that route , be advised , the clutch will grab like
a light switch initially , but settles down after a little use .