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Update on slippage in transmission. Don't use synthetic or semi-synthetic motor oil. Thought I was doing a good thing by using UTV/ATV semi-synthetic oil. Owners manual states if you use high quality oil it might cause clutch slippage. Changed motor oil and used Dollar General conventional motor oil 10W-30 and raised idle speed to around 1700 RPM. Most of the issue is gone, will change oil again after I put some hours on the current oil.

My best guess is that the spline on the fwd end of the driveshaft is stripped out, but only one way to find out...