The 1 way in a picco 26 is inside the backplate (not in the PS like most engines).
Pee Wee, mine slipped some today when I was starting it up for the first time in over 2 months. Then it started catching fine. Then it got stuck (engaged) and I had to pull the whole mill and remove the PS to get at the starter shaft to crack it loose. That was a pain.
Some oil is essential for the 1 way to operate correctly. If there's no oil on it, it won't work right. If there's some kind of contamination in it, it won't work right. I'd hose it out with nitro cleaner and put some after run oil in it and see how it works. The fuel should replace the after run oil when running it and it should work ok. One last question, are you using a roto start?