1976 KZ400B - Replace or repair damaged head & valve guide bores

I recently picked up a 76 KZ400B for very cheap. The po said he rebuilt the motor but was unable to get it working and was done with it. I figured it was worth the adventure and would be a fun project so I took the bike in. Turns out, he took a lot of shortcuts and/or decided the motors problems would become the next owners problems and just hid them. I don't mind. Its something new to learn and a new adventure to be had!

Digging in, cylinder 2 had low compression. After the head was pulled and valves removed, I discovered a bent valve and a loose valve guide. 

First question is whether its safe to assume the loose valve guide means the softer aluminum head was wallowed out by the harder brass valve guide? I'm not sure how this could be fixed other than having a machine shop repair the head or somehow redress it to accept a valve guide with a larger outer diameter but identical inner diameter. If these valves are even available, they are probably unobtainium. 

My initial solution was to just replace the head but would like some thoughts and general guidance on how to do this if its the recommended direction to go. On the KZ700 I've worked on, the cam is held down by cam caps that are machined in place with the head. I could be wrong but its my understanding these are a matching pair and cannot be swapped out with caps from another head. In the KZ400, the cam rests in the head and is held captive by the head cover, which appear to be a machined matching pair (or whatever you call it...). 

So my second question is if the head is replaced, do I have to find a matching pair head & head cover that are from the same motor? They seem to only be available separately on ebay so might be difficult to find outside of just purchasing an entire motor. 

Happy to take some pictures/video but there isn't much to see. The valve guide is loose enough to be moved around by hand but does not come completely out of the head. Moves vertically approximately 1cm. 

Any thoughts would be appreciated!

I would say that is a machine shop repair. Getting the angles absolutely correct for the valve guide is crucial  Chris Schumann at Schumann Motorworks does that sort of work on a daily basis.

I think you are correct about needing a matched head and cover. 

Thanks for the rec, Tex. Ill reach out to Chris to get his thoughts. 

eBay search "KZ400 valve guide"  finds several hits for standard and oversize valve guides.  Lots of valves, valve seals, etc available also.  

Before ordering, I'd get an assessment by a machine shop, to make sure the OS valve guide will solve the problem.