Starter clutch/chain issue?

Anyone got an opinion on this one? I'm faced with a problem and I think I know what it is but I just want to be sure. Last few rides on my KZ440 were great, except for when I turned the engine OFF. Then I heard a scary clunk coming from the bottom of the engine (I thought from the left side, but the mind can play tricks). I turned the engine over by hand, making sure nothing was seized, etc. and it was silky smooth - no problems. So I thought I'd ride it again a couple of times to see if the problem recurred. Same thing happened: scary clunk when turning the engine OFF. On my last ride, I heard that clunk much louder, and, even worse, sounded like something heavy bouncing up and down, like a ball. OK, I thought, this is it - the engine's toast. Once again, gently tried turning the engine by hand at the crank, but this time it was LOCKED.

Took a few hours to compose myself, then went to take a look. Yep, definitely locked i.e. seized. I'd thought of a few things, including the starter clutch waving goodbye, so I removed the alternator cover. Removed the starter clutch. No debris, nothing... The rollers and springs were fine, and it rotated in one direction and stopped rotation in the other direction. All good. Couldn't figure it out. Looked closer and the starter chain was at a slight angle. It was hard to see it but it was as if the chain were about to come loose. On this (last) occasion the starter gear had locked, and it was so tight I couldn't turn anything. So I cut off the tight (misaligned) starter chain, checked the starter motor was good, then removed the starter gear and tried turning the engine again. All good - smooth as butter. 

So the conclusion I reached was: a new starter chain is needed because the old one had gotten too slack. What do you think? Seem reasonable to you, or is this wishful thinking? I'm second guessing myself because the horrendous clunking bouncing sound when the engine was switched off sounded really, really bad. 

If you re-assemble everything (without the starter chain fitted) and kick/push start the bike how is it then ? noises often sound worse than they are (the inside of the motor is like an echo chamber)
Is there any sign of the chain trying to eat the guide #25

Thanks, that's a good idea. Everything is loose now, but I'll try and bump start the bike tomorrow. No, no sign of damage on the guide. Maybe the rotor retaining bolt had worked itself slightly loose and this exacerbated the effect of the slack starter chain. 

All sorted - all good.