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I would say your assumptions were correct. needs engine job doing if the head gasket hasn't gone (although this is most likely) the O ring seals on the cylinder liner have gone (only other place coolant can mix with oil) either way it's back to the drawing board.
 

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the engine number is stamped on the top crankcase, you can reference this number with the Kawasaki data base for the exact year.
other than than that look at the engine, if it has only 4 fins on the head it's pre 89, if it has 5 it's after 89, then look at the centre bolt on the CCT if it's a 10mm head it's a gen 1 (pre 93) if it's 12mm head it's (post 94) to make absolutely certain screw out the top inspection bung on the timing case look at the rotor if it has exposed magnets it's a Gen 1 if their enclosed it's a gen 2 (post 94) after that it doesn't really matter as all gen 2 motors are the same.
 

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are you using the bog standard EX wiring and CDI, if so look if the box has a single plug or 2 plugs attached to it.
 

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hi, @CountryBrat a question for you (may pose this to others) when looking for an engine to put in a buggy, cart. snowmobile, boat, or whatever else, what made you choose the EX500 engine for the job, been meaning to ask this for a long time but never got round to it.
considering the hassle of weight, water cooling, problems with carburation and wiring why the EX ???.
there must be dozens of alternative engines out there far better suited to the task. lighter air cooled less carb issues and simple wiring. so what makes the EX the surprise go to engine for this type of mod.
 

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now I do have another question. With my current situation if it was the head gasket shouldn’t the pipes be bellowing a fog like smoke?
not always no.
Okay so personally speaking I love a challenge. This project was sold to me half done, a basket case, and the price was right. I was on market place looking for a new quad came across this for $500 and it came with almost everything to finish the job. I didn’t even know that this had been done before until I already had the project and started doing my research. Now I agree that there are a lot of monkey wrenches being tossed in causing problems and heartaches but at the end of the day I love a good challenge.
ok so it wasn't your choice thanks anyway, always wondered though. a few years ago a mate was building a Hydro-plane but had no idea what to use for a power unit in the end we chose the unit out of a battered jet ski, that worked really well.
but given the scenario in modern times I could not think of a more unsuitable engine that could have been used than an EX unit.
 
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