Arizona Warrior:
I was thinking its better to machine off the inside (the side against the bike) is that right?
southboundchicken:
WAKESTAR:
Does it matter witch side of pulley is machined ?
no

actually i went back to edit my reply and this crappy software( or maybe it was my crappy computer) wouldnt let me do it. the side that faces the trans case is the side that needs to be machinced as it will hit the casing in a bad kinda way, if my memory serves me correct ( but it is starting to wonder a bit

the pulley will slip onto the shaft either way but the machined side MUST face inward