Welp, just thought I'd update.
Indeed it was the hydraulic clutch. I put my old cable clutch back on and with some adjusting works perfect. I actually feel like I get more power to the ground with my cable clutch
I'm not really sure what to make of the hydraulic cable clutch. It's a nice novelty and all and does (did) function as advertised. I get lots of questions about it but with all the issues I've had (in the beginning and recently) I'm not quite sure it's worth the hassle. Neutral is a breeze to find but adjusted properly I don't have a problem finding neutral with my cable clutch either. The hydraulic lever is also actually harder to pull. Clutch control is much better than cable however. As far as using the adjustment screw, I've used it more with the hydraulic than I did before with the cable.
I've had mine for a year now and obviously the hose is leaking or something as it does not function as well as it did when I first got it. The parts that go into it don't seem like they would have much longevity, I mean I think the slave cylinder is meant for pit bikes
If your XS isn't a daily rider I can definitely see it as invaluable. But if you ride as much as me it seems to wear out pretty fast.
Don't get me wrong....I was happy with the purchase. But like they say if it ain't broke don't fix it and for my situation and my particular bike, think I should have left it alone. I am young and strong hands so it's not necessarily a must to have HC. This bike is my primary transport so I can't really afford to have issues like this coming up. As far as reliability goes other than snapping a cable with cable clutch you don't have to worry about leaks, reservoir, hoses, what not.