Right as i'm not familiar with your bike I know its a four stroke single and assume its an overhead cam engine. The power loss you mention will possible be due to the stiff rear wheel rotation you mention, your bike will only be a low power output in the first instance so anything that saps any of this will result in a loss of speed., you need to get the wheel rotation free, remove the wheel, wipe out the drum with a rag and some brake and clutch cleaner spray, if there is a build up on the outside edge of the drum, then rub this away with some fine emery cloth but only stick to built up part. also whilst the wheel is off, check the wheel bearings, that about covers the wheel problem.
Now as for the engine it doesnt sound good does it, the ratchety noise you describe is a bit of a worry and why was the gear select awkward? at this stage i'm thinking if its a chain driven overhead cam has the chain jumped a cog..has a valve clouted the piston? I suggest you check your cam timing as per haynes manual but really I think youre heading for an engine strip to identify whats wrong here. ...