Cannibal puking something out!
What type of Honda transmission oil are you running? It sounds like you may not be running the right oil. Is there a visc rating? It should be in the 80W to 90W range (but do not use hypoid in this range). I've never seen factory Honda trans oil red in color for this application. The oil is exactly what would go in a 2 stroke motor / trans, since the engine oil is mixed with the gas or injected from a seperate tank. Rath may be right, change the oil with the above, and try riding, before you tear it down.