No valve clearance is bad! It can contribute to premature cam wear, burnt out valves and seat, poor performance, bad starting, etc etc. It's bad maintainance if they're out, it's an hour's job tops to keep them within tolerance.
You'll need the clutch drum off to check the nut on the balance shaft, on my spare motor it was as slack as piss!
The gear itself was a bitch to pull from the balance shaft probably due to early stages of a keyway being pummled! The sprung gear that causes the balance shaft damage is on the crank shaft.
It may be a good idea, if we change the the sprung gears on our cranks, to pull the balance shaft gear fron the shaft and check the keyways just incase it's too late. I haven't had time to replace mine yet but the bike is parked up far away from the salt that's being sprayed on the queens highway.