Did some more investigating on this engine. Compression test...#1= 181psi. #2= 181psi, #3= 160psi, #4= 144psi. I tried pressurizing the cylinders with air to look for valve vs rings leaks, but didn't have valve covers off to to be sure of tdc on which cylinder. #3 has massive leak from exhaust valve, and # 4 has massive leak from intake valve.
Also, before the compression test, I ran it on the lift long enough to see thermostat open and cooling fan come on. Started out blowing smoke from left exhaust (sidestand side), this smoke eventually cleared up. Then, after a 2 hour cool down and still on the lift it smoked on the right side ( and not on the left) for a short period of time (2 minutes max), and then both sides were smoke free. After a cool down, I checked the oil level and there was a noticeable loss of oil. There was not a noticeable loss of coolant.
So...it seems I'll be doing both head gaskets if only to check/lap the valves and look at the cylinder bores.
Also check water pump for play before putting on new belts.
Question...would head gaskets account for oil in coolant and blowing smoke from oil leakage? Just trying to plan what to look for. In the past I have replaced head gaskets but looking at the old gasket told me nothing!, it just looked bad all over.
I have decided this will be my naked wing, with a custom seat pan, higher bars, and reduced weight where possible.
CORRECTION, checked oil after overnight rest and oil consumption is negligible!