With a good button on the PTO, a good button on the release arm, the PTO assembled and adjusted properly, I generally adjust the turnbuckle on the engagement lever to where I can spin the clutch by hand without it grabbing. I don't get to concerned about the gap clearance between the 2 ware buttons. If that doesn't work, then something is likely not quite right within the clutch assembly. Is the bearing in the clutch free spinning and not grabbing ?