It runs!!!! BUT!

Yes I replaced valve stem seals. All are new

Take a look at the o-ring that seals the outside of the float needle jet. I've replaced many of those over the years. They shrink with age and that causes the fuel.level to always be too.high.

Alrighty sports fans, since there is not yet a definitive explanation, I offer an insane theory. Flame away if you need to.

The crazy theory sez there are two problems--

1. The cam cover gasket has failed around the transfer port from the reed cage to exhaust port number 2.
and
2. The reed valve for number 2 is not sealing due to carbon buildup or outright failure.

How did my addled mind get to such a place?? Normally, when the initial exhaust pulse exits the combustion chamber, there is high pressure in the exhaust port and up the transfer port, closing the reed valve. Once the initial pulse is past the exhaust port there is decreasing pressure, and a moment of low (negative) pressure that opens the reed valve, thus introducing filtered, fresh air from the airbox. This dilutes the exhaust gasses, making federal and kalifornia exhaust gas sniffers happy.

In the wild theory, the gasket failure allows oil from the camshaft box to enter the transfer passage and then into the exhaust port right above the exhaust valve during the low (negative) pressure moment. Some of the oil is drawn into the combustion chamber. This may be aggravated when the bike is parked on its side stand, allowing some oil to drip onto the exhaust valve or into the combustion chamber. During the high pressure moment in the exhaust port, oil may be forced up into the reed box, and past a leaky reed into the hose.

ymmv

every body has a therory mine is the oil rings were not installed correctly on that cylinder.it is real easy to overlap the thin rings and the expander.

Are you using break in oil?

What would happen if the expander ring would overlap? I was pretty careful on not overlapping them since the manual mentions that specifically but what would happen if they overlap? No break in oil.

The rings would be sloppy in the lands. I hate to see you have to open it back up but if this has happened, it should be corrected before bore damage occurs.
Steve

Well I'm gonna open it up. I want it right.

Swest- I that expander is overlapping on the #2 cylinder is that the root of my problem??

Could be. I almost did it myself. Others have folded over one of the rings getting them in. I use beer can sleeves to do it. Still a PITA.
Steve

Well gonna tear it down I will let you know in a bit. Cross your fingers

I didn't think to ask, Look at the valves through the ports. Especially the intakes. If you see oil, that might be your problem. Also look at the bore. Being the two inside pistons are hard to get at, you could have missed it. I'm hoping you don't have to slide out the pistons. Pics too.
Luck
Steve