If it smells like oil . . .

Unless your bike has "lots" of miles on it (over 50k), I think it's highly unlikely that the valve guides need replaced. The valve seals will go bad due to age, valve guides go bad due to wear.

Valve guides are sleeves that the valves ride in. They are bored to 7mm and once they wear, the valves will tend to rock and you won't get a good seal. This MAY be causing your smoking problems but it is FAR more probable that a valve stem oil seal is shot. This seal goes OVER the upper end of the guide and its purpose is to allow just a tad bit of oil to lubricate while keeping most of the oil from puddling in the top of the head. When one goes bad, since a puddle will form, the excess oil gets into the combustion chamber so the effect is a sort of one time poof of oil and then the smoking seems to stop.

Swapping valve guides is not a trivial matter. You can't just press new ones in. The head must be heated and special tools are required to drive the new guides into place. You will also need to clean out the 7mm guide bores with a special tool and then to further complicate things, the new guide will not be EXACTLY in the same place as the old. This problem is called concentricity by machinists where the footprint of the valve won't be in EXACTLY the same spot and you will need to recut your valve seats. Take this head to a machinist to have this work done unless you are prepared to lay out some serious money for tools... and take the chance of ruining the head.

Swapping valve stem oil seals is a lot easier. This requires pulling the head and either buying or fabricating a valve spring compressor. I posted a thread on this here on the new site and it should be towards the beginning of the posts in this forum area. Essentially, the cost will be a head gasket and new valve stem oil seals plus the compressor and possibly a torque wrench if you don't have one. You will need a manual to help you understand how to reassemble the cams into the head.

Honestly, you can operate the bike with no problems with bad valve stem oil seals other than the annoyance of the smoke and possibly a fouled spark plug now and again. It is a job for when your riding season is over.

Thanks again for clarifying the situation in detail. I'm fairly competent turning a wrench. Have pulled cams for valve lash but never dealt with guide replacement/seals and that is why I posted the labor expense from reputable shops. Dont plan to replace the guides myself due to complexity and inexperience. If the decision is made to only replace the seals, may consider purchasing the valve spring compressor (with the special extension to get at the keepers) and perform the replacement myself.

Since the engine has 36K miles (NOT mostly mine) and internal engine condition unknown (other than compression test listed above) . . . sounds like I may consider sacrificing expense today for reliability tomorrow. If I only replace the seals today, who knows . . . next season I may be pulling the heads again to replace the guides. Then again I may be replacing parts prematurely.

I'll make that decision once I perform the leakdown test and pull the heads as the valves may need to be resurfaced anyway and the cost for APE guides are reasonable to me. Thanks again for all of your support and I'll post the final results later.

Scooter, If you replace the guides, you may want to just buy new valves and springs and get a valve job done at the same time. This will add a bit to your project but if you have close to 40K miles, the exhaust valves won't clean up all that well... they tend to have carbon deposits burned on them and cleaning is difficult. The intake valves may be reusable but if you are going to do a valve job, it is worth it to replace everything at once. Anyway, keep us posted.

Wiredgeorge. Based on your statement, I may just rework the entire head. Nice to know you've got a tight top end the next time I had my wheaties and decided to buzz it up a bit. Thanks again for your input and stay tuned for the updated post "if it dont smell like oil".