Spacing looks fine. Could this be problem with the timing? After one revolution of the flywheel with the timing mark lined up, the cams are nowhere near top dead center, but with a second revolution everything lines up?? When I originally made the marks on the cams, I did it with permanent marker and they rubbed off. So I had to refind top dead center. Did I set this wrong? should I try and set the cams on the off revolution of the flywheel?

Here's a better question: how do I find top dead center when reinstalling the cams?

 

Take the spark plug out and make sure the piston is at the top when doing the timing

 

Do you have a manual? If not, PM me and if its not too big I can email it to you.

 

I've never seen the inside of a YFZ. However, this shouldn't be as difficult as some have made this seem. There has to be some marks on the cam gears to line up. There should also possibly be some marks on the flywheel to line up. When you put the cams in their races the lobes should be pointing in a certain way, then line up the flywheel marks and the gear marks then bolt the gears to the cams. I trust you don't have a service manual to help you out. I'd go to the dealer and purchase one. Then try this all over again. However, you say the motor seized and it wouldn't turn over at all. This to me would sound like an oiling problem, if the motor did seize then getting your marks lined up will not solve all your problems as the piston and rings are most likely smoked as well. JMHO.