Adjusting Go Kart Chain Tension?

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This question has probably been addressed a few different times on the forum, but I'm OCD about accuracy and doing something right.

I just put this New engine on and mounted it. I had the chain pretty tight in the beginning with very little slack. I've probably driven it for maybe 20-30 mins total since I put the new engine back on.

My question refers to the slack in the chain and how to get it as accurate as possible. I've read 1/8 of an inch should be the slack in the chain. I uploaded a quick video to see if Im on par or slightly off.

Since I had no slack hardly when placing it the first time, the engine may have shifted a centimeter or two because of the high tension. It had some serious torque from a dead stop, but now that it has some slack in the chain, I have noticed less of a response from the clutch. Kinda feels like its slipping or not catching like before in mid speed before reaching max speed.

As far as from a dead stop right now, it's responsive it's at about 5-15mph it feels kinda out of sorts.

Any ideas on the chain tension and maybe trying to trouble shoot it if its not just the chain currently causing it.

Here is a 27 second video to show chain tension...

http://www.youtube.com/watch?v=7QeuK7xN53w
 

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I remounted the engine again and I've noticed now that the belt on torque converter seems to jar into gear sometimes and is either only engaging fully at full rpm or from start.. The middle is horrible.. It's a new belt, should it be doing that?
 
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