Thought that was funny as well.
Smoke coming out of the pipes (silencers or connections) has nothing to do with your clutch. The cable or perch problem is just that. A problem at the perch or a stretched cable that needs the length adjusted. The clutch being "wasted" isn't really a very technical description of what is wrong with the clutch. Anyone that told me I needed a new clutch because it was "wasted" wouldn't even get my money for parts. The clutch mechanics are simple. You have friction plates and steels. If things get too hot down there you can glaze the friction plates (this is a visual observation) and "blue" the steels (another visual observation). Other than that the clutches will wear out. In which case you measure the thickness or each plate and steel to see if it is within allowable tolerances. You can buy clutch plates and steels along with tension springs from rocky mountain for about $50. Maybe an hour to install depending on how much beer you drink in the process (usually takes me about 2 hours) and you're done. Now, if you have a problem with the clutch basket (sometimes the plates wear grooves in the stock basket and causes trouble disengaging) it will need replaced. At this point, a new stock basket is about $35 or a billet one (that won't groove easily) is about $150.
So, break down your problem to were the problem is at. The clutch is completely seperate from the exhuast. The sloppiness of the cable has nothing to do with the condition of your clutch (although if it is too tight it will definately effect the condition of your clutch!). Once you break each issue down to what it really is you'll realize this thing isn't a rocket ship. It isn't going to the moon and it is pretty simple mechanically and electrically to work on. And if you don't have a banshee bible (aka clymer's manual), go out and get one.
Best of luck,
SP