do these steps then see what you have:
1-eventually what carlos said. your primary holds exactly 1 quart of fluid with a full drain. full drain is minimum 1/2 hour. and don't get stupid tightening the 5/8th drain plug. wipe the magnet and threads clean as a babys' behind, install new O-ring, reinstall and just snug it up.
2-if you found alot of gunk and metal shavings on plug magnet with your present condition all points to failing output shaft bearing and seal. it's behind the front belt drive pulley. a job only for professionals.
3-adjust primary chain as per manual. a tad on the loose side is good as the chain tightens considerably when hot as shaughn mentioned. no need to replace derby and window gaskets if not leaking. clean and re-use.
4-adjust the clutch pack as per manual. lube the clutch cable while doing this. 3-in-1 dribbled down the inner cable works well. use patience and allow it to gravity feed.
5-install top quality primary fluid such as amsoil motorcycle 20wt-50 or any other JASO-MA fluid that IS ALSO compatible with buell/sportster stators.
now see what you have.