I don't know where I am in the resolution of thus issue, but I was pretty careful not to allow the clutch actuator arm to drop too far down when putting on my risers and replacing the clutch cable. To facilitate putting the cable on the arm I did loosen it and pry it about a third of the way off the shaft to give me a little more clearance to get the ferrule in the opening. I gently tapped the arm back on the shaft after the ferrule was in and finished doing the rest of the install. Sorry to hear about your issue and frustration over the situation. And a firm YES on those mark's must line up.
As for clutch cable length I found 2 1/2 inches longer to be the best choice in spite of some finding 1 1/2 inches to be enough. I posted pictures in the thread below and I will add.... by not skipping on the length, my clutch cable adjusts out much nicer now and also pulls much nicer now as well. The additional cable length and the Barnett cable made a big difference.
Give a look at my pictures in the post and you decide on the cable length from the pictures.
Rocket Clutch Cable Install