Help with KZ400 Rear Wheel Installation

Hello all. So I'm trying to mock fit everything up. I removed the rear wheel, bearings and spacer for inspection. I reinstalled the spacer inside the wheel, and pounded in the old bearings in after cleaning them up. I plan on getting new ones but wanted to learn how to do things myself. After inspecting the exploded view of the rear wheel assembly, I put everything together and now the side spacer seems like it will never go in. I have to pry the swing arm open to even attempt to install it. It's roughly 3/4" off which seems like a mile to me. Please look at the images. On the sprocket side, the shaft with the threads looks like it's sticking out the amount I need. The only way that shaft would go IN anymore is if the bearings were seated further down into the wheel. I tried to pound them in more but nothing is budging. Does anything stick out wrong?

Turn the flattened sides of the cuppeling sleeve #27 so it fits into the slot of the swing arm. This give you the space you you need for the wheel install.

Rear brake shoes. If you don't know the age of the brake shoes, replace them.

Scirocco wrote: Turn the flattened sides of the cuppeling sleeve #27 so it fits into the slot of the swing arm. This give you the space you you need for the wheel install.

Shot out to Germany! Appreciate this so much...wow....Thanks! This was frustrating me. So I'll order new bearings and rear brake shoes now. Thanks for the advice martin. I honestly was going to run those old ones because they cleaned up nicely.... think I found me a new home

The front is disc. Any advice on a caliper rebuild kit / shoes? I can make a thread in brakes as well because I plan on running a replacement braided line directly from the master. The instrument cluster is getting bypassed so I wont need that brake safety light switch mounted on the that brake union piece. But I want to keep blinkers....Later challenges.