I had the same problem with my88 Lt250r, 01rm125, and my banshee. I have found the best way to get it to shift smoothly in and out of gear is to use automatic trans fluid, you can use what ever flavor you like, but the type "f" for the older fords is the best for that. I couldn't find neutral, the banshee wouldn't start in gear and forget about trying to push it in gear with the lever pulled in. I have changed the oil in it 3 times now in the week I have had it, gets better with each oil change, plus the oil is only 3 bucks or so a qt.
But i dont have a 100hp dune machine either, all my riding is xc/gp and the oil gets changed after every ride. not sure I would want to use such a thin oil at higher temps and speeds you dune guys are dishing out
just my .02