As far as I can tell the decompression pin on yours is the right way round. The biggest cylindrical part (which has a domed top) will be the bit the raises out of the cam lobe.

TBH you can't really check anymore than you have without removing the camshaft, which isn't particularly difficult to do. In fact the only way you can really tell that the pin is working correctly (moving in and out) is to have the cam out.

With the cam removed and sprocket and decompression shaft and pin fitted you can check that (a) the pin is raised above the exhaust cam lobe under the spring tension of the weight mechanism, and (b) that is retracts when the weight is flung/moved outwards.

If the pin stays sticking out, you will get a tapping from the top end, loss of a little compression and a little more back firing.

I'm still thinking that the shaft might have been 180 degrees out though?

This video, although on an air-cooled XT600 motor, explains pretty well (in a redneck tone) what the pin does and what happens if the shaft is out of place.

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