Often the O-ring for the kick starter is perished and/or loose in the outer cover. Sometimes the corresponding steel bush is worn, and sometimes also the kick-starter shaft. I've seen that steel bush loose in the housing. Worth checking it all carefully before pressing out the steel bush.
When replacing the O-ring, note that Norton finally supplies a Quad Ring for that function, but you are best served by machining the outer cover to take a radial lip seal as fitted to the MKIII.
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Lucas, BTH, & Miller Magneto & Dynamo Restoration
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