Well, I finally got my starter clutch/generator assembly off my 2006 GSF using the bolt/spacer method discussed here:
http://gstwins.com/gsboard/index.php?topic=42350.0

The damage is a little worse even than I thought. I would not re-install any of these parts. Luckily I recently ordered a complete starter clutch/generator rotor assembly from a 1989 GS500 off eBay. I am hoping that the magnets picked up most of the metal fragments. I'll do an oil and filter change after I put it back together and run it for a few minutes. I'll post an update once I finish the work.

Below are some photos of the carnage, but has anyone ever figured out why this happens? I feel like I have a seen a lot of threads about this problem over the years and its not exactly a minor repair job. My 2006 has 34,000 miles on it.

I think I've heard this referred to as "goats".  I'm not sure why though, and I've only ever seen a couple threads on it.  I don't think it's all that common.

Quote from: 007brendan on May 06, 2015, 11:17:50 PM
I think I've heard this referred to as "goats".  I'm not sure why though, and I've only ever seen a couple threads on it.  I don't think it's all that common.

User with the nickname "goats" had this problem first on this forum. Hence the name. Sorry, that's all the help I can provide.

The small bolts at the back can come loose and with  vibration and starting torque applied overtime they will stretch and break. Might have been overtightened in the past, or put back without loctite.

You are on the dirty side of the oil system there, so the garbage should not have gone into the high-pressure clean area and the bearings etc.
I would strongly suggest however that you drop the sump and clean out the mesh filter at the bottom of the engine where the oil. intake is. Examine that and your oil filter very carefully and clean meticulously.

I had an issue where the bike was making a rattling noise and those 3 bolts were stripped so i had to install 3 new ones then the rattle went away.

Goats is when the magnets comes loose inside the rotor and smash things up.  Can't see the whole inside of yours but it looks like the magnets are still in place and you just had a loose starter clutch.  I think Buddha coined the word goats? 

You must have heard it for a while before it broke loose and did all that damage.  I had a loose starter clutch last year and didn't find it until it ran a little longer and I opened the left side cover a 2nd time.  Still I only had a little damage to the 3 bolts holding the clutch to the rotor and replaced them. 

Had about 100k miles on mine before it came loose and it only cost me 3 bolts plus the bolt and spacer to pull the rotor.  I loctited the 3 new bolts and torqued them to 15 ft/lbs and also lapped the rotor to the crank and put some threadlock on it too and torqued it's bolt down to 80+ ft lbs.  No further problems but I've not used it much since then.

Pics here:

http://gstwins.com/gsboard/index.php?topic=67148.0

Anyone else think I should bother to drop the sump? I assume its fairly easy, but its one more gasket to buy and more time before the bike is up an running.

I changed the oil 3 times after pulling left cover, right cover, and then left cover again to finally find problem and fix it.  Never considered dropping the sump, oil was free and clear each time.  Maybe decide after you see the oil that came out of it?   

Buy a sheet of gasket material and make your own, takes 20 minutes with a sharp knife. I'm not worried about the oil, I'm worried about old epoxy blocking the mesh and starving engine of oil, besides all the junk that might be in the sump and can damage other things (like bits of magnets)

Yeah so i had to do the same as GSJack. If it was me I would probably drop the sump and clean it out.

I took Sunday to get this all sorted out.

I replaced the starter clutch/generator assembly with a combination of parts from my original engine and the 1989 part I bought.
It took forever to scrape all the old gasket off the stator cover.

I also dropped the sump and cleaned it out. There was a good amount of metal sludge, little things that looked like tiny rocks and a few bits of the generator's epoxy. Not enough to ever clog the sump screen, but it felt good to get it sparkly.

Also replaced the oil filter. Refilled the oil and gave it a crank. She came right back to life, making me very happy. I was concerned since the bike had been sitting for 6+ months.
I will finish putting the plastics back on today and fill up the tank with fresh gas so I can give the GS a ride and make sure everything is working as it should.

Thanks for everyone's help and comments.

Well done!!!!