No combustion in cylinder 2

I've recently bought a 77 KZ650 and am trying to diagnose what I believe is a non-firing cylinder.

I've observed the following:

Bike seems to idle and run fine, BUT I'm new to motorcycles and to KZs. Perhaps the bike is running weak, but I wouldn't know.
Starts on the first kick when warm, starts easily with the starter when the battery is charged.
Plug 2 was wet with fuel, with no signs of firing. In comparison, plug 1 was showing very rich running.
Lots of gasoline in oil, oil light will illuminate after engine is hot and sitting at idle. (haven't run the bike much since learning this)
Exhaust pipe for cyl 2 does not heat up with the rest of the pipes.
Exhaust output for 1&2 feels weaker than 3&4.
Decent spark on plug 2.

I've done the following.

1. Cold and hot compression test. Cylinder 1 reads 50ish psi on the 1st puff, 120 with throttle closed , 150 with it open. after 10 kicks.
2. Leak down test. Cylinder 2 seemingly tested no different than cylinder 1. I admit this test was a bit rushed, but no obvious issues.
3. The dyna coil for cyinder 2-3 measured 400k - 1M on the secondary. I replaced it with a new, identical 3 ohm dyna coil.
4. Ignition timing seemed advanced. I retarded it but haven't run the bike much since.
5. New plug in cyl 2, replaced plug wire with known good wire.
6. Oil change with Valvoline JASO MA 10W40.

I'm going to try the following next:

1. Charge battery. Redo compression test with starter.
2. Leak down test again.
3. Check valve clearances.

What else? Check float in carb 2?

Battery and valves. They don't get adjusted because it takes work and money. Common issue.
Steve

Factory air box? or pod filters? Id say make sure the carbs are squared away. Ignition pairs 1 and 4 and 2 and 3. Once cylinder leads me to think its in the carb if you've got compression.

I'd check your float fuel levels and thoroughly clean your carbs out. Seems to point to a carb issues, plus the fuel in the oil problem.

Then new 7mm copper HT wire and non resistor plug caps, plus clean up the coil terminals and check for tightness. Try swapping 2 and 3 plug wires, if the problem transfers to the other pot then assume ignition, otherwise fuelling. These ignitions run a 'wasted spark', so 1 and 4 fire together, just as 2 and 3 do. The extra spark on the exhaust stroke being wasted.

You got the order wrong on the checks. The valves should be done before checking leak down or compression. Lots of idiot previous owners ride bikes into the ground because of neglected maintenance. Don't assume anything, and you can't diagnose running problems on a bike that has neglected maintenance so take care of things first off.

Thanks all!

Swest: I will check clearances and charge the battery tonight.
Tyler: I've got pod filters, and I've read that usually requires a re-jet. I have no idea if that was done.
Tryell: I'll take off the carbs and check the float level.
Ness: Thanks. I agree. I was trying the easier stuff first.

If the PO swapped to pod filters without re-jetting would that cause rich or lean running?

Pods without jet changes would create a lean mix.

There is no need to take the carbs off to check the fuel level. Float height is irrelevant. Fuel level is important and should be checked using the clear tube method. It is clearly described in the Kawasaki Factory Service Manual. It has also been described in several discussion threads in this forum. The search box should be able to find one.

TexasKZ +1

Thanks Tex. I noticed that in the FSM too.

I jammed a plastic T into the hole, plugged one end, and used some clear pvc for the other.
The fuel level seemed ok. It was a bit difficult, reading between the carbs, but the level seemed ok.

I checked the valves and all were between 0.1 to 0.15mm. I also re-tightened the chain tensioner.
Also, I realized what I was calling cylinder 2 is actually cylinder 3. Doh!

After charging the battery I checked that each coil was turning on, and that the battery voltage didn't drop much.
it started just fine and cylinder 3's exhaust started getting hot! And the plug showed signs of good combustion.

I was about to take it for a test ride and found that the headlight wouldn't turn on.
The fuse had blown, and I noticed the 20amp main fuse had continuity but looked like it got toasty.
After replacing the headlight fuse, the battery was so low that the starter wouldn't turn.

I'm going to get replacement fuses, charge the battery and try again. I might have some electrical gremlins........
The PO put on LED signals, and placed a resistor from the flasher to ground. So I'm not sure what I can trust of his wiring.....

Anyway! Thanks all. I think I'm very close.