Originally Posted by Pleiades

Firstly, being able to start the bike in first gear without touching the clutch is nothing to do with the clutch! It'll be the either a duff clutch lever switch of dicky neutral light causing the start inhibit system not to inhibit starting.

As for the clutch, as Pepsi suggests, nine times out of ten when this problem occurs it is the pull rod and release lever/shaft that are out of alignment, gears not meshed or set in the wrong position. What you have to remember is the teeth on the pull rod must face backwards before the cover is replaced and the release arm on the cover must be pointing to the back of the bike also (parallel to the casing). As you push the cover home the release arm will (or should) move round to its normal position. At this point, when the cover is bolted down hand-tight, push the release arm forward as far as it will go to check the index/punch marks on arm and casing line up. If not remove the cover, mover the release arm back or forward at touch corresponding to how far out the punch marks were.

A lot of people (and we had one only last week) make the mistake of trying to line up the punch marks before replacing the cover which results in... a permanently engaged clutch!

I know you say you fitted the release mechanism correctly, but just double check by removing the clutch cable and push the release arm forward with your finger until it can't move anymore. Do the punch marks line up? Does the release arm move forward at all?