^^Glad you're making progresss!! I love ur seat cover, BTW. I need one of those for my '05! Anyways, from what I can see in the pic, nothing (except for the cable, of course) is missing from that clutch arm. It IS, however, bent. This clutch actuator arm lifts right out of the engine case once the cable has been removed, so you can take it out and probably straighten it with a vise. Be sure to tip the bike so that the clutch arm is facing up a bit before removing it; otherwise, the pushrod for the clutch may slide out of postion and prevent the actuator arm from going back in.
As for your clutch engaging/releasing problem, just search the forum! There are several recently-posted threads discussing clutch problems. I have a tip, though: before condemning the clutch mechanism inside the engine, be aware that this clutch actuator arm you are looking at will flip-flop back and forth quite a bit with the cable off, while doing nothing to disengage the clutch when you move it. This is NORMAL! There are several springs putting pressure on the clutch inside the engine, and there is no way you are going to disengage the clutch by moving the actuator arm with your fingers.
Do this: Jack up the back end of the bike, start and run it with the tranny in gear, and grab the clutch actuator arm with a pair of heavy-duty pliers. This arm swings a good 35 degree arc during normal op, so using the pliers, don't be afraid to pull on it counterclockwise (towards the front of the Blasty), until the arm is pointing at the reed cage. I bet the clutch will now have disengaged, and the back wheels stopped spinning. If this happens, just go ahead and git/install a cable and ride on! If the clutch still won't disengage after trying to work it with pliers, there may well be something wrong inside the engine that will need looked at. Somehow, I don't think so... Whoever rebuilt that engine new at least enough to get it back to running conditon. If a guy can do a top end, he can do a clutch. I:I My .02, anyhow...