Oil in #4

Here's where I'm not sure about the lack of markings on the top ring.

The "N" ring came frome the "wiper" (2nd ring from the top) and is .045 in thickness.

The compression (top) ring doesn't have any marking on it and is .038 thick.

The piston grooves won't take the "N" ring in the top groove.

The top ring has a slightly raised outside edge that was installed facing down (as are the other 3 cylinders) 

okay then i might be wrong but it looks like in the picture that the ring with the N mark is the comp ring.I will go to bed now it is bedtime here in Norway now

Could you hear any escaping air during the leakage test ? (Oil filler hole etc) is there any sign of leakage on the gaskets from the oil passages around the outer studs ?

In the leakdown, you can hear the air from the crank case vent.

I did replace all the seals between the jug and the head (dang those things were expensive)......

This also gives you the opportunity to have the cylinder plateau honed if you want.
www.enginebuildermag.com/2023/01/honing-the-ls/

When in doubt, consult the manual!
(the "N" mark denotes the second compressin ring)



Oil control rings, install like this:


For the "expander" (wavy part) of the oil controll rings, make sure that the ends "butt" together and do not "overlapp".


H.

I was thinking that your engine was a 900 my mistake.Anyway the 900 has a grove/ridge on the second scraper ring and it is possible to install them in the wrong ringland. Here are pick from 900 manual.

Just to add If the second ring is placed upsidedown i will push oil upward instead down to crankcase.The  ring has a chamfer / angled edge to keep it sharp as the ring wears into cylinder wall. If the ring is worn the chamfer /angle will be gone and the edge of ring gets 90 degree straight .If you placed the old rings into the bore again and also did not deglase the bore it is very big chance that it will be a oilburner.Thing you should do is measure the bore for taper and out of round and piston to wall clearance. If you are lucky you can just deglase the bore with a ballhone or / stones put new rings on and ride.If you dont have a boredial gauge you can buy a set of new rings and put them in the bore and check that endgap is in spec or at least close to spec.The piston to wall clearance can also be measured by using feelergauges not 100% acurate but it works.I did check that when i rebuildt the kz900 engine.I also used a boredial gauge but for fun checked if the feelerblade method is usable and it is ,for piston to wall clearance but not for measuring out of round or taper

There should be holes in the bottom ring groove to allow oil to flow back to the sump through the inside of the piston.  Are the holes all clean?

That's a good question,  I'll check that and compare to the good cylinders. 

From a glance , liner looks pretty shiny. You're over thinking and second guessing yourself, just hone and purchase a fresh "sharp edged" new set of rings. They are an abundant supply out there, NPR, OEM, etc. Might as while buy a set of 4 after all the time you've wasted assembling/disassembling.  

I do think a hone/ring sounds like a fairly inexpensive plan.

Since I don't have many miles on the rebuild, should I spring for a new head gasket or can I just reuse?

I also wonder what might have happened in it's previous life to have such a low mile bike in this condition?