Hacksaw chain!!
 

While I was mucking around with crankcase cover etc, I noticed that the side of the chain has been rubbing against the footrest top mounting bolt quite alot, more so when rear suspension get compressed harder.

Also looks to be very very close to the frame where it passes over the swinging arm pivot point.
Since it was on bike when I bought it, not really sure what flavour it is.
Is this normal, also what would the best chain and size to use, if my current one is wrong.

Has the front sprocket been replaced?

I've seen one or two which have moved on the spline slightly and caught the frame, if it was doing now, you would know about it as it sends vibrations through the frame.