If you assembled it wrong or mixed 04-05 clutch parts with 06-07 clutch parts. An '04-'05 needle bearing and guide in a 06-07 basket will do this.
These parts changed part numbers in 2006
NEEDLE BEARING '04-'05 23.8mm vs '06-'07 27.8mm(+4mm/+0.157")
SPACER
OUTPUT HUB
PRESSURE PLATE
P.P. ROD
These parts changed part numbers in 2006
NEEDLE BEARING '04-'05 23.8mm vs '06-'07 27.8mm(+4mm/+0.157")
SPACER
OUTPUT HUB
PRESSURE PLATE
P.P. ROD