I am working on a 1985 suzuki lt125. I recently removed the exhaust valve and found that the head of the valve was melted. could this cause it to run like crap?

 

yes very much haha that sucks how does the piston look and the intake? Also check the rings on the piston and every other component the lobes on the cam and gear. Yea it could make it run horrible because when the exhaust stroke is up and it can't move due to being melted the exhuast has nowhere to go or the intake could be just pulled right through without going through ignition. with something that old just check all of the parts internally and if you haven't yet clean the carb also because i'm sure you have alot of dirt in there.