I suspected this when you originally posted. Time to split the cases. Buy a Clymer manual. Plan on a complete motor tear down, inspection, and do all the internal improvements you can afford.
That's where they inject the aluminum into the mold. They grind it where they remove the tree. It looks like some goober used Yamahabond on the clutch cover and globbed some on that spot.
If opening the bleeder screw frees it up then the problem is at the master cylinder. Either the pedal is hitting the clutch cover and not allowing the master to release completely or the master needs rebuilt.
The rear subframe looks bent upwards. Pretty common when the bike goes flopping down a hill. The rear 16" should be straight. Also, check the upper steering stem hoop. It's common for it to get bent downward. If it's hard to get the gas tank out, it's definitely bent. Unbolt the upper steering stem plastic bushing. If the steering stem springs forward, that's another sign that the hoop is bent. Check the welds on the triangle shaped gusset for the hoop. It's common for them to crack. Make sure all your plastics fit properly. If you're going to powder or paint the frame, cut off all the unneeded brackets first.
$106 from the same guys.
http://www.ebay.com/itm/Titanium-Shock-Bolts-Bolts-for-Yamaha-Banshee-Raptor-700-/301077778526?pt=Motors_ATV_Parts_Accessories&hash=item4619a2505e&vxp=mtr
So, is that a hollow pin in the bearings that goes into the oil hole in the cases? Sounds like a cool idea. I bet it's tricky to get lined up right in the cases.
Just buy the bushings from Mattoon. He's a site sponsor. I doubt you need all the other pieces.
http://www.ebay.com/itm/Yamaha-Banshee-A-Arm-Bushing-Banshee-J-Arm-Bushings-MFG-By-Mattoon-Machine-/321333610049?pt=Motors_ATV_Parts_Accessories&hash=item4ad0f9c641&vxp=mtr
.035", .30 something, yeah, sumpthin like that.
Curious how you came to this conclusion. Obviously not by reading the numbers on the top of the piston with a borescope or by pulling the head.
Strip the vin# with paint stripper first and tell the powder coater not to blast the shit out of the vin#. Some vins are stamped deeper than others. If you're one of the unlucky ones to have a vin that's not stamped very deep, consider having them tape off the vin before they PC. Then spray it with a thin layer of spray paint.