Stator plate had a minor crack and bend, got that fixed. I made sure to put it back on correctly with the marks lined up. It was flush with new seals.

Compression test failed, got zero compression. Will recheck the timing next.

The carb boot isn't cracked, just not sealed to the head.

 

Noticed something odd - there is pressure going from the crankcase air hose to the air (filter) box, should that not be the other way round?

 

Normal for pressure from crank case vent into the air box as this recycles gasses back through the air filter and carb into the combustion chamber again. If it failed the compression test(less than 50 psi) and if the cam timing and valve clearance is good,then I'd do a leak down test. If bad enough you'll hear air pressure through the exhaust( usually valve problems) or through the carb or air box,normally piston/ring problem.Plus spray soapy water around the base and head gasket area while it's under pressure.

 

I checked the timing, and it's still good. I adjusted the valve clearances after putting the chain back on, so that should be ok. There is a new exhaust rocker arm. The cam lobes looked good.

I had taken the head to an automotive shop to have them check and reseat the valves. Gave them the specs from the manual. Also gave them new valve seals. They said it was all good when they were done.

I will get the leak down test done next. There is zero compression - so hopefully we can find the leak.

 

Did you check the valve lash for the intake and exhaust valves between the valve roller and rocker? Should be checked at TDC and neither lobe of the cam engaging the rocker.
Sounds like a valve not closing to me.

 

That makes sense - valve not closing. How do I check this? Not clear on what to look for. I can check the clearances again. What is a valve lash?

 

Here is a link to instructions for how to adjust the valve clearance (lash). It's fairly simple, but if you haven't done it before, there are plenty of videos that can help know how to get the right gap with feeler gauges and what it should feel like between the rocker and gauge.
https://www.manualslib.com/manual/81...page=56#manual

 

Just pop the valve cover at tdc as you have pictured. You can tell real quick if any valve spring may be lower indicating a stuck/bent valve.Plus you need to use two feeler gauges as the manual says to set clearance on the exhaust rocker arms. This keeps the rocker arm from cocking and possibly spiting out valve keepers. Old English bike riders sometimes found that out the hard way years ago.

 

Got it - I did that already, but will check again. I put the single feeler gauge under both sides of the exhaust rocker, I'll get a second gauge to do it right.

 

As long as you had a .006 feeler gauge under each rocker arm that's what I meant.Get both sides close while you do a final adjust on one side and tighten the nut. Then go to the other rocker arm adjuster and set it. This is just a precaution to keep from popping keepers if the forked rocker arm ever happened to get in a bind.Doesn't happen much on newer engines,but was a big problem years ago if not done right.