XR engine trouble

Ok, so I am not yet sure what happened. The bike was working normally the last time I rode it. I then went to ride it again a couple of weeks later and it would not start. The only real sign of problems was how easily it would kick through the compression stroke. I disconnected the compression release in case that was hanging open, though that made no difference. I pulled the tank and the valve adjuster caps and checked the valve clearance, which all seemed normal (slight play). Next I pulled the spark plug and checked compression. Houston, I think we have a problem...

 

With the cylinder not building any compression and the valves seeming to open and close properly, it was time to pull the head. I drained the oil and found another unpleasant sight:

 

Hmm, that looks terribly dark for the 500 or so miles I have on this oil change. Could be clutch, could be something else... Ok, time to pull the engine. The oil screen at the bottom of the oil tank is showing some bits of junk.

 

Ok, the top part of the cylinder head all looks fine:

 

With the head off I can now check piston slap as well as how the valves seem to be seated. Everything looks fine, so I started an atf leak test on the cylinder head.

 

With the cylinder off I could see that the piston, rings and cylinder all look good. Although I was not hoping for catastrophic failure, I was hoping to find an obvious sign of the missing compression. Everything seems to look ok so far. Scheise...

 

Here is how the leak test looked after a couple of hours. Both intake valves are leaking as well as one of the exhaust valves, though it seems very minor.

 

It is hard to tell from the picture, though it does look like there may have been slight contact with the valves on the right side of the engine (left side of the pic). However, the exhaust valve on the right side is the only one not leaking. This could also have just been some carbon or something. The valves show no obvious signs of contact.

 

Here are the top and bottom sides of the head gasket. Seems like there was no problem here.

 

Another good example of how dirty the oil was.

 

The clutch side of the engine. Nothing too exciting except more dirty oil and some small metallic bits. I need to pick up a spanner wrench so I can disassemble the clutch and have a look at the plates. That should help determine if the black oil is possibly from the clutch. I have never noticed any clutch slipage.

 

I pulled the clutch and it does not seem all that bad. I'll definitely throw a new one in, but I am not convinced that is what was causing the oil to get so dark.

 

Here are a few new pictures of the cylinder. The surface looks good and the ring gap is .012"

More shots of the head gasket. There do seem to be some burn marks on the bottom of the gasket (between the gasket and cylinder) where the back of the cylinder would be. Could this be enough to lose all that compression? Not sure...

 

Here is how the head looked when we pulled the valves. Definitely enough crap to have caused a problem. Apparently the head was not done when the engine was rebuilt.

 

Ok, on to the rebuild.