Would the tire spin easily before when it was in gear and the clutch held in?
It is not unusual for there to be a significant amount of clutch drag. I often need to shift to neutral in order to start my bike due to clutch drag. If this hasn't changed then it isn't part of the problem.
Riding along, a sudden loss of power followed by a rear wheel skid to a stop is a very common engine seize sequence. It is very unlikely to be the transmission and even if it is the first steps will be the same: Get the cylinder off and see what you've got. If it isn't a seize you need to tear it even further apart.
Since your piston is still stuck I recommend that you get it unstuck before you remove the cylinder head. Remove the spark plug and then spray in a good amount of WD-40., let it soak for a while. Put the transmission into a high gear (5th/6th) and then rock the bike back and forth and try to get the piston to break loose.
Rod