The click has got so bad that it completely locks up the rear wheel. This happens in neutral, and when in gear with the clutch pulled in.
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thek.
First you need to isolate the problem. Remove the rear chain and rotate the rear wheel and also the countershaft sprocket by hand. This should tell you if the problem is in the rear wheel or in the engine. Also, it will be easier to feel for play in the countershaft with the chain removed.
It still sounds like a bearing is starting to go. If your countershaft bearing or wheel bearing is starting to break up, most likely the bearing cage is broken. This is the little cage inside the bearing that seperates the balls. If this cage is broken, it will allow the balls to stack up against one another and bind. If this is the problem and you run the bike like this, eventually the bearing will break the inner or outer race. Then, you will have some serious problems.