When I put it in either 1st or reverse with the clutch handle in the bike will slowly crawl. Is it a worn out clutch?

 

No the clutch cable probably needs adjusting. You have too much slack in the cable and when you pull it in it's not pulling in far enough, so just adjust the screw out on the clutch lever some.

 

I tried adjusting the cable at the lever and at the lever on the case. It just makes it move faster!!. Also it will not shift into neutral unless the engine is off

 

I think you adjusted the cable the wrong way. You should be making the cable tighter. Don't make it too tight...the clutch lever should have some play in it when its adjusted right. If that doesn't fix it you might need a new cable. Also, did this start happen after the weather became cold?

 

I adjusted the cable so when the clutch lever has 1/2" of play and when it is pulled all the way in it pulls the lever on the case as far as it will go to disengage the clutch. I don't know if it only does it in the cold weather as I bought it yesterday

 

If you are 100% sure the cable is pulling it far enough, you might just need the oil changed. If you are riding in weather from -10F up to +30F you should run 10w30 oil. low 40s and above can be 20w30. I would warm the engine up, shut it down, then change the oil. Ride it around for a bit on the new oil. Also, sometimes the clutch friction discs can swell up from sitting too long (years). If the oil doesn't fix it, I would think about replacing the the clutch discs.

 

I can move the lever with my hand and the cable is pulling it all the way in. I changed the oil using 10w40 and a new k&n oil filter. I had noticed some light metal flakes in the filter. It does not appear to have been ridden much so I'll see what happens after a few rides