stopping gasket leaks

The gaskets don't leak, but o-rings do. The KZ650/750 uses 1000 o-rings, and over time they all will eventually leak, so wherever it's leaking it will be an o-ring. One of the bad ideas in design vs the 900/1000 and probably the worst point of any KZ650/750.

So how much squish should an o-ring have? 
The last time I had the head off my bike, I measured the depth of the o-ring detents in the cylinder and the thickness of the head gasket, and it left little to no squish for the o-rings that came with rebuild gasket kit. I discarded those o-rings and used slightly thicker ones.

ckahleer wrote:

So how much squish should an o-ring have? 

For face seals O-ring manufactures recommend 20-30% compression of the original cross sectional diameter.