Ok, I got this one. I bought a 1976 XS650 a few years ago, and I went through it (carbs, clutch, brakes, master cylinders, calipers, new battery, etc, etc) and on the maiden voyage, what Manbearpig1 describes is precisely what it did. I checked all the parts of the shifting mechanism, made sure the pawl at the shift drum was equidistant from the two nearest pins, checked the drive sprockets, the clutch, including the plates, thrust bearing, washers (they were not in the right order) and everything else I could think of that could possibly cause the problem. I knew down deep what it was, but I had to do my due diligence so as not to miss something simple. And the gearbox didn't clunk when it happened.
I eventually pulled the engine and split the cases, and lo and behold, the engagement dogs for first gear and the pockets they slot into were rounded off. Apparently, a PO had done some neutral drops and wore them off. The kicker is that someone had been in there with a die grinder and tried to smooth out the chips and burrs, probably making it worse. Also, the shift fork was well worn from the abuse. I have several donor engines around and replaced the damaged parts, and while I was in there, I ordered an overdrive 5th gear from MikesXS and installed it. Photos of the damaged parts included, with a pic of the innards of the gearbox.
Reassembled everything and problem solved - I got to put 500 or so miles on it before I put it away for the winter, with no issues from the gearbox whatsoever, with the bonus of a much more reasonable ratio for high gear without having to change sprockets and making 1st through 4th taller.