Yes, clutch on handwheel is engaged. I went as far as taking the little screw out and turning the clutch clockwise as much as I could so it locked on there super tight. Same deal. I also used PB blaster on the machine then used q tips to clean it up and same thing. I can feel a lot of resistance when I turn the wheel, so something is bound up for sure. It looks like the gears on that shaft are worn. My guess is there is a piece of metal stuck between the two binding it up.