Laydown Gearbox worm issue

could be you have a later AMC type clutch and pressure plate or perhaps a too long pushrod ? Or not the correct number of plates .

Adam,
I have just had similar problems with my ES2  with Laydown Gearbox.

First thing I have to say is don't try to adjust the worm through the 'Norton' oval inspection cover.
it is quicker to remove the main cover.

As to your main issue, i would remove the primary drive and inspect the clutch plates and everything else.  I found i only had one plate still working, with others jammed half disengaged and basically mangled.

It took quite a few miles before the new parts bedded in.
One positive that came out of all this, I took Robert Tuck's  advice and fitted 1 thou over sized rollers in the clutch basket.  It possibly could have taken 2 thou over, but I can now find neutral while stopped with the motor running!
As my mate said, while pretending to puff on a pipe " they're not supposed to do that, Lad. I can send someone round to put it right" 

Don Anson 
Melbourne. 

Hi Don,  lovely to hear you have achieved the holy grail ,  a clutch that just does what its supposed to do !. Makes such a difference to the pleasure of riding these old nails. I have a couple of clutches that need the plates skimming on a lathe to ensure "flatness" and increase the chance of free spinning clearance when lifted. Not done this before so will post the result. Thanks for your update too ,so usefull for the cause and gratifying to know we are not wasting our time!.

Some clutches on laydown gearboxes I've seen have the outer pressure plate without adjuster screw and some have one. So yours might have an adjuster.
Guess your assumption of worn plates is correct. So the simple task of checking thickness of friction plates is a good idea. When apart also check is that the plain plates is flat.
Especially on the laydown box a 6mm ball bearing between a two piece push rod is a good idea.
New pushrods can be easily made from 6mm silver steel, hardened in the ends.
Main problem is getting primary cover oil tight.