that's the gopowersports series40 Kit, correct?
Not a fan of that concept, but the chain should indeed run free.
I even doubt it's a TC issue at all to be honest.
Do you happen to have one of those cheap laser levels at home?
(some recent home renovations and a $6 line laser to level pictures or tiles?)
Since my best guess is that your engine itself is slightly tilted to one side,
which in turn tilts the TC backplate slightly and of course the sprocket...
and that could cause the chain to rub .. either on the backplate or the driven itself.
It certainly looks tilted on the third pic.. but that can be caused by the camera;
so a laser level can verify it's right angle in regards to the axle sprocket, which is terribly hard to do with a bubble level and some straight edges and angles.
If you don't, then you can try the following,
adjust the axle sprocket to as close to ideal as possible inline with the TC sprocket (chain installed);
now loosen the engine bolts correct the alignment.
or -of course- go to your hardware store and buy one (you want a magnetic base and a 90° turnable lens.. should cost you no more than maybe 10 bucks .. I got mine off ebay for less than 6)
'sid
[
EDIT]
quickly fake laserlined your second image...
see what I mean?
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