78 kz1000 #2 oil leak!!

Just rebuilt a 78 kz1000. now its blowing oil out of the #2 exhaust port. I also replaced valve guide seals. I don't think it is the seals as the bike literally gets a small puddle of oil underneath the exhaust after running for a a couple minutes. As for compression It is not real bad .. . . its about 3psi lower than the other 3 cylinders. I have never seen this before! I have a kz guru around the corner that says it sounds like a cracked head. He might be right but i didn't see any cracks while wrenching, not that i was searching high and low for them. Thought Id pick your brains before I disassembled it. Let me know what you think . . . . any feedback is greatly appreciated!

Have you tried the compression test with a teaspoon of oil in the cylinder? If so, does it raise the PSI?

Possible an exhaust stud hole in the head has gone through into an oil channel so that oil is working its way to the outside. This can happen inadvertantly when re-tapping or chasing threads inside the head and going too deep.

Also, the stud has slightly non-standard threads on one end for a tighter fit into the head with standard threads on the other end for the exhaust clamp nut. But this factor alone shouldn't cause any oil leakage.

Good Luck!

Beat I did try ut with some oil in the cyl. Bumped the compression 15psi. Also, heres an update; I pulled the motor apart, it def. isnt the seals, The piston has no oiling on it, but the valves are aren't oily either. The plug has excessive oil and it blows oil through the exhaust pipe. Only number 2 is dead though. as far as the exhaust stud being the cause of the oil loss, I don't see it as that means the port would also be compromised. let me know what you think. My next guess is take the head and have it magnafluxed