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No eBay APP ID and/or Cert ID defined in Kunena configurationJust noticed you already purchased a set, but here is a re-chromed set that appear to be early Z1 might save the cost of restoration.

John's book is a treasure trove of Z1 details, particularly the early ones like yours.  Like you, every time I open it I learn something new.

Correction, the pistons/bores are first over, 0.5mm

I spent the morning measuring pistons and bores. As seen in earlier photos, the pistons and bores look great, hone marks in the bores, un-scuffed surfaces on pistons.
Readings were consistent in all cases. I used my telescoping gauge and my 2 to 3 Starrett micrometer. 
The conclusion? The previous work setting it up with first over pistons put the clearance with the bores at the top of the tolerance which is 0.0025” to 0.003”. I’m at the top. 
I didn’t want to see that but there it is. This bike will likely never see big mileage (Maui is an island after all), drag racing, desert riding, etc. maybe this clearance doesn’t matter that much, I imagine really high mileage bikes go over this limit and run fine all else being equal. 
My only option would be to go second over and find someone that knows how to bore/hone one of these without screwing it up so I have to re-sleeve it. 
I don’t want to do a big bore, I’m trying to keep it close to stock.
Any Z1 opinions are welcome.
I’m naming this bike the “Wounded Z-1”

If I understand correctly, you're saying you have 0.003 inch clearance between piston and cylinder wall, and that's the top end of the spec.  I checked, and that's what the book says, but it also says clearance may exceed the upper limit, but not the lower limit.  So I think everything is fine.  But you will want to ensure the rings are within spec for gap or you may have a compression issue.

The book also says there should be no more than 0.0004 inch difference in the cylinder bore diameter.

HRM, thank you, I found the bores to be very, very close. I have not checked ring gap yet but the compression was great, a bit high even and very close together,
I think because the ticket for the work done in 2009 talks about decking the head.
I removed my choke plungers to send them to Robert Meggitt for the little viton washer insert repair. My idle mixture screws had little effect when it was running
and I think the choke plungers were the reason.
Has anyone seen a part for the little nylon washer that lifts the choke plungers? Mine work but they are a bit tired. Also the seal cap. I'll do some searching.
My oil pump checks out fine, no scoring, 0.002" clearance. Yay.

No eBay APP ID and/or Cert ID defined in Kunena configurationNo eBay APP ID and/or Cert ID defined in Kunena configurationJets R us has dust cover and spools or….

Video of short run prior to reardown.

Those are for a later version, mine look like a flat washer, I'll get a picture. I'm thinking they may be able to be fashioned out of nylon round stock.

Your correct I’m sorry the SS use a different part. You need 16039-014. Partzilla shows them available.

The dust caps are the same 16039-015

www.partzilla.com/product/kawasaki/16039-014

Partzilla’s site is confusing. I can’t tell if they have them or not.
I was looking at generic nylon spacers and washers, I may actually be able to make them if I can’t source them.

does anyone know what exhaust studs are made from? Is it a chrome Molly alloy like B16 which is used in elevated temperature applications?

Today I broke down both rims and the bearings in the front hub. The grease looked like original grease, into  the ultrasonic it goes. Paint being removed from both hubs, rear was painted silver. 
The front hub was a treat. Kawasaki does not leave access to the back of the outer races so you have to break out a sharp edged hard tool (screwdriver) to pound on the spacer with. Then, after the spacer is out you have to clean up th e mess. Oh well, have to be careful going back together to not over drive the last bearing and squeeze the spacer which interferes with the bearing.
Both rims are pretty corroded, spokes are a mess. I will deviate from stock here and use stainless spokes so they don’t start corroding the first time I ride it over to Lahaina for lunch. That side gets a lot of salt spray on the highway due to sea level rise, they are planning on moving the road inland hundreds of feet.

While I’m thinking about it…..
the engine came with tall head nuts, not correct for this year and engine number. I had planned to change them to short ones but in John Brookes book he says the reason they changed them is the short ones can’t be properly torqued. I don’t want to create a problem by fixing the short nut long nut problem.
anyone have any thoughts on this?