Partial engagement in 1st gear

[305martin]

65 Dream. I can'y get full engagement into 1st gear, whether the engine is running or not. I get a grinding noise if I shift into 1st with the motor running, if I shift into 1st and then start the motor I also get the grinding. Same with or without using clutch. It will go into second. I have never ridden this bike, it was a basket case when I got it but it had good compression so I didn't tear into the motor. I did pull the clutch plates and cleaned. All new cables and clutch hardware seems to be working OK. Where is the most likely place to start tearing into it? Shift drum? If it ever stops raining I will try to ride it and see if I have 3rd and 4th gears.