Loud clacking noise coming from the top right side of the engine

No,the APE adjuster is 100% manual.
You have to check it from time to time.(as you do the stock one)
But just keep in mind,that unless your engine has been modified,and is putting out some serious ponies,you don't HAVE to go that route.A stock adjuster will work.
I'm not saying NOT to use one though...because you can.

The APE adjuster is threaded to the end,and you simply tighten the bolt as you normally would,to tighten the chain.
And then you tighten the lock-nut.

And what Reborn said about pulling the valve-cover off and checking the location of the timing chain,to be sure that it didn't jump...a very good idea.
Do it NOW,while you're in that area.Do it for peace of mind,because you MAY HAVE jumped a tooth or 2,without tension on that chain,and turning the engine over.
And while you're at it,you can inspect all other components,and put it all back together,knowing it's going to last.

With the stock adjuster assembly, the spring tension determines how much pressure is exerted against the camchaim to take up slack.

With the APE manual adjuster, there is no spring to set pushing pressure against the camchain, so it is your responsibility relying on your own sense of touch to determine how tightly to screw the adjusting bolt into and against the the camchain to take up slack.

Is is not good to take up too much slack by screwing the manual bolt in too tightly. That is why the stock spring version is more "fool-proof" as the spring "automatically" sets the correct pressure against the camchain, whereas the "manual" method may be erroneously set too tight with too much pressure against the camchain.

Good Luck!

Well, I spoke to the local guy and he wont part with any of his cam chain tension adjusters. The salvage yard only has automatic adjusters and he doesn't recommend them. E-bay has nothing, so it looks like I'm going to have to order one from Z1. Which means no riding for another 2 weeks until it arrives. The bad part about living in Canada and on the west side of the country is shipping is pricy and takes forever.

As far as setting up the APE adjuster how do you tell where to set it? How can you feel where it goes? What is too tight or loose?

I plan on taking the valve cover off to see if there is any damage, while I'm in there anything worth overhauling? I have not been in side the motor yet

Are you sure he knows the difference between the manual and the auto adjusters? The way to tell the difference is the Kawasaki manual has the longer 6mm bolt with a jamnut, where the automatic just has the 6mm bolt tightened flush with the body of the tensioner. There are 6 million manuals out there, all 650s and 1000s had them up through 1978. There should be ample supply at any salvage yard I would think anywhere because unless abused they didn't go bad generally, but haven't been to any recently so could be mistaken. I would assume the APE has instructions with it if that's the way you go otherwise here's one on ebay. They should not be rare.
tinyurl.com/4q2spj

from what I was told by two people the auto version was crap and everyone wanted the manual to replace the auto.

Well I pulled off the valve cover, the gasket was glued to the engine what a mess!! i gave a tug on the chain seems tight. What else should I check?

What does it mean if there is oil pools? In cylinder 1 there is a lot of oil and a small amount in #4. #2 and #3 are dry. I am assuming that it means oil is getting past the rings?

cylinder #4

You are checking the timing marks line up and that you have the correct number of links between them.
Might as well check your valvle clearances if you have a fealer gauge since your in there.
A little oil is good.

What about a POOL of oil

ANY oil is ok up there,James...better than NO oil!

If bike stands on side-stand oil will drain to the lowest spot which is #1. There should be oil and I can´t se how there could be too much.