Clutch problem?

Ok, I have a 1997 XT 600 with 7,800 mile on the clock. It has never had anything done to the clutch. So I took it into my dealer last week to have the sled looked over and really check out the clutch. They said everything was fine.
But my sled is getting really poor MPG lately. 8 mpg down from at least 12 mpg. Also with a brand new belt it sits in the clutch just below the rim. Also smells like the belt is burning every now and again, feels sluggish in mid-range and really cant get any top end anymore.
So, do I have a clutch problem? Where should the belt be sitting in the clutch? Can I adjust the clutch?.

Please help.

Time to get a new dealer. Clutches on the twins should be rebuilt every 4000 miles or so! You can buy the tools to do it, or pay as much to have it done. You will probably find grooves on your weights like i did, the bushings wear and cause binding, which leads to the grooves.

Things to check and buy:
Weights (I'd recommend 8ca's with rivets to keep rpm at 7800)
Rollers
Spring (stick to the stock spring)
inner bushing and cover bushing
You'd probably have about $200 into the parts, and it's quite easy to rebuild it with the right tools. I borrowed them from a local dealer

Good luck!

PS, secondary bushings too...there's 2 of those as well.