Mark, I think that's probably too tight of a loop around the pulley. The diagram seems to show the pulley isn't anchored to a fixed object, yet the cable is. You're asking to pulley to do what convention asks of the cable, which is to move the lever.
If I were in the same position as you, I would suggest scrapping that system entirely and reverting to the Speedster-standard shortened cable. Otherwise, it seems to me you could re-engineer that pulley so that IT was mounted to the side cover plate, and the cable would travel under the roller and then travel to the clutch fork.
Another alternative, and I did this to a mild degree last time, is to put a Phillips screwdriver into the cable's guide tube and bend it just so slightly upward -- or to whatever angle it needs to be at in order to aim right at the fork in its halfway position, then use a brake-line flaring tool to widen out the mouth of the tube to further reduce friction.
It worked like a champ for me.