KZ550 performance question

Sounds like not combusting on all four cylinders.

Has the spray water mist test been performed?
(Spray onto exhaust headers a few seconds after starting a cold engine.)

Should instantly sizzle and vaporize -- not bead up and run down the header pipe.

Good Fortune!

I would check that plastic filter. I've seen them get hot and bend or kind of stretch out clogging the flo. Happened on two different bikes

One side of the engine seems to heat up quicker than the other

That's a big clue, problems are likely as above, also check your carb diapragms if a CV carb.

Sometimes the left hand carbs get the worst sediment build up if the bike spends most of it's life on the side stand, all the crap finds it's way to the lowest point,

Some car fuel filters work best on a pressurised EFI system, now I buy them from my local bike shop and I think are better for gravity fed systems.

I just picked up a fuel filter today at the local kawasaki dealer. The bike is still running the same. There is a paper filter element from Z1 installed in the factory air box. The PO threw its original air box away and installed pods without jetting the carbs. He never got it running again and didn't have an air box to reinstall so he sold it to me. The headers aren't blue but I've attached a pic of them anyway. The carbs don't have diaphrams in them because the 81 550 used tk22 carbs and not cv carbs. I sprayed water on the headers a few seconds after a cold start and the water didnt sizzle on any of them

It may take a little longer for the header pipes on the combusting cylinders to sizzle off the water mist sprayed onto the headers.

Could spray after 15 seconds running, and then after 30 seconds, and then after 45 seconds, after which one or more of the header pipes should start sizzling off the water mist spray.

Good Fortune!

From memory on my 81 slide carb GPz550 I used 105 main jets, and may have lifted the needle a notch.

Clean your carbs out, this is likely your problem. and upjet it while you are there.