The same question was asked recently on another forum and below is one of the answers and solutions. Hope it proves helpful.
Problem:
I noticed the rear tire and engine were sitting very crooked on the bike. This was causing uneven tire wear and also for the tire rub on the rear shock and the clutch housing.
Cause:
A few years back my oil tank got cracked and slowly leaked two-stroke oil into the body of the bike. Naturally, this oil managed to seep out every pore and seam in the frame and get all over everything. Quite a bit of the oil probably found it's way into the swing arm, where it soaked into the swing arm bushings and of course degraded the rubber, causing the engine to not be supported properly and hang crooked.
Solution:
Replace swing arm bushings (easier said than done).
Procedure:
This job was a real pain in the neck but it shouldn't have been. Learn from my mistakes and you should have your bushings replaced in no time at all.
Tools required: Socket set, box wrench set (10 - 15 mm and a 22 mm socket for pivot bolt, adjustable crescent wrench, easy out tool for 1/2" pipe, and special bushing installer tool (see below)
Step 1: Place a 2x4 under the kickstand to lift the front tire off the ground a little.
Step2: Support the rear of the bike by removing the cowls and mudguard and lifting the rear of the bike onto a milk crate or step stool of the appropriate height. The idea is to get the rear wheel off the ground about 2 inches.
Step 3: Remove kickstart lever, exhaust assembly, and loosen clutch and rear brake cables.
Step 4: Get a regular automobile jack and a block of wood about 4 inches square or so. Place the jack under the end of the swing arm where the pivot bolt goes through and run it up so that it is just holding the block of wood against the swing arm.
Step 5: Loosen and remove the pivot bolt and nut. This may take some doing if they haven't been removed in a while. You may need to adjust the tension on the jack to get the bolt to come out.
Step 6: Slowly lower the jack so that the swing arm is gently lowered out of the bike. It may take a little persuasion to loosen the bushing ends from the frame of the bike. If done properly, the engine should pivot on the rear shock and the swing arm should drop down, exposing the ends of the bushings.
Step 7: Using your properly sized easy out tool (one of these:
http://www.ted-kyte.com/3D/Pictures/Easy%20Out.jpg), remove both bushings from the bike. This will require a bit of grunting, sweating, cursing, and twisting. If you don't get it right away it's probably because you weren't holding your mouth just right. Keep the washers that are in the swing arm behind the bushings.
Step 8: After cleaning the swing arm inner of old oil, grit, rubber and whathaveyou, you are ready to install the new bushings. To do this you need to make a bushing press tool. I made mine out of a 1/2"-13 x 12" carriage bolt, but if I had to do it again, I would have used all-thread rod. Get about 12 or so inches of 1/2"-13 all thread rod (or equivalent), two jam nuts to fit, and quite a few 1/2", 5/8", and 3/4" flat washers. Replace the washers that go behind the bushings and put the new bushings in place. Run the all-thread rod through both bushing rods (same as the pivot bolt goes through), and a few of the 3/4" washers followed by the 5/8" and finally 1/2" washers and jam nuts so that when you tighten the jam nuts down, the force is applied to the rubber bushings evenly. Proceed to tighten the jam nuts and the bushing should press home. This may require a little adjustment in tension on either side to get them seated evenly and properly. I didn't, but you may be able to either soak the bushings in warm water or use a little vaseline or spit to lubricate the bushings so they slide home easier.
Step 9: Jack up the swing arm back into place. You probably didn't get the bushings pressed exactly all the way home, so you may need to use a vice to compress the bushing ends 1/4" or so to fit into the frame. Clean and re-grease the pivot bolt and install. Tighten bolt to specified torque. Remove jack and reinstall exhaust and kickstart lever, and re-attach brake and clutch cables.
Step 10: Inspect and enjoy your much improved handling and comfy ride!
As Breezer mentioned, because of the design of the bike, the engine will hang a little to the left when it is on the stand, but it squares up when you are sitting on it. If the tire is rubbing on anything, or you notice uneven tread wear, or the lean is more than just a degree or two, then you should consider replacing the swing-arm bushings.