Sounds like the clutch is not adjusted right. Once the clutch is adjusted, then the cable is adjusted so that there is 1/16 to 1/8 inch play in the lever. I use a dime to check mine. It seems like with it having to be released that far to engage, that the clutch might not be fully engaging and may start to slip under load.
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2013 FLTRU, Jackpot 2/1/2 Stainless Ceramic Coated Head Pipes, Fuelmoto Stage 1 Intake, Power Vision, Jackpot Full Size Ceramic Crossover, MADSTAD 16" Windshield, Motolight Running Lights, Nostalgic Rails, Airhawk R, Hayden Primary Tensioner, V&H Roland Sands Slant Slip-Ons