Whelp! I found the problem.

That's about 128 thousandths, or just a very tiny bit over 1/8" - seems about right, given the pics. 

 Perfect time to consider the zx600 engine swap…………

 

A new/used crank is a high likelihood.  Rods don't just come loose without thrashing the crank.  You'll know soon enough, though...

Injected wrote:

A typical stock Kawi air cooled liner is about 3.25mm thick.

I measured it just now and it’s a bit under that, at 2.9mm. But I happen to have another “barrel/jug/block” on hand here, and it measures 2.85mm. I suppose it’s possible that it was bored just a bit at some point. But I think it’s more likely that it’s stock, and my measuring accuracy is not perfect.

Daftrusty wrote:

Perfect time to consider the zx600 engine swap…

Definitely something I’m thinking about. Before I knew it was possible (which was just very recently), I had purchased a Wiseco big bore kit for it (probably over a year ago). I’d been waiting to find a set of ZX550A cams to swap in when doing the kit, and also having a second bike to ride while this one was in my shop. But now with this happening, I’m playing it by ear. It’s not necessarily easy to just find and buy a good ZX600 engine, but I am looking.

I hear that!
I am also finding it impossible to find a donor zx600 for the motor and accessories. 
But the instant I do, I’m putting my spare zr550 engine up for sale. 
You could always look for a zx550 motor and use an offset sprocket. It has higher compression, better cams, everything from the zr motor bolts right up (exhaust, carbs, ignition, oil cooler…etc) and has the correct clutch cable mount. All that and bolts right in to the Zephyr frame. It will still need all the same preventative maintenance as any other spare motor.  But it’s honestly getting hard to find a gpz/zx550 motor that isn’t already clapped out.  I bought a eBay zx550 motor that showed a video of it running and everything. It arrived on the pallet with #3 rod welded to the crank. But their ad “technically” did not say that it was a running motor. They refused any wrong doing and I had no recourse but yo eat it.
I at least got my 1980’s Moriwaki ignition cover from it. 

Lots of options to weigh. 

According to the 650/750 FSM those nuts do not get any Loctite. I guess Kawaski thought they did not need thread locking, maybe because of the super fine thread? Or maybe the fact that there is tension from the clamping action??

I have a spare set of rod bolts so I do know they are a fine thread, but not a lock nut. I replaced the bolts/nuts on my 650 drag bike with M8 and pretty sure those are a mechanical type lock nut.

Daftrusty wrote:

You could always look for a zx550 motor...

I get what you're saying. But since I already have the big bore kit, I'm leaning towards fixing this engine, though maybe using parts from other 550 variant engines.

Injected wrote:

...those nuts do not get any Loctite. I guess Kawaski thought they did not need thread locking...

According to a knowledgable friend of mine, they make the underside of the flange on the nut ever so slightly concave, so that when they are tightened the flange flattens out and puts a lot of pressure on the bolt. And the bolt is meant to stretch as well, making it even tighter.
This same friend also said that he puts red thread locker on them when doing his drag race car engine assemblies anyway. He said that "while red thread locker is supposed to be permanent, I don't care, anything with threads can be taken apart."

I double checked those nuts and they do have about a 5 degree negative angle on the bottom, smooth with no serrations. Loctite could not hurt for the extra piece of mind but you would have to back off on the torque setting by about 10% if I remember correctly.

Nuts held with red Loctite will come off easily with some heat from a propane torch.

Daftrusty wrote:

 Perfect time to consider the zx600 engine swap…

As luck would have it, I may have found a donor bike for this local to me. Question about it though, I understand that it’s the ZX600 A/B/C motor that is a direct fit, and I can see that those motors look different from later model engines. Most notably the cam chain is in the middle of the motor rather than off to the right hand side. But it looks like the “D” model engine is somewhere in between the earlier and later designs. So will a D engine also fit, or only the A/B/C motors?

I have found numerous zx600D bikes near me for parts, but unfortunately the D bikes have a totally different motor. Different architecture, with forward-tilted cylinder and head, cam chain is on the side, different ignition system and carb and exhaust spacing is no longer sharable with zephyr/kz/gpz/ zx…… 

Only zx600a/b/c bikes will work. The B model is the Ninja 600rx that had an all-one-piece aluminum frame unlike the steel modular frame regular Ninjas had. Those bikes are very rare, so I wouldn’t expect you to come across one.