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I would agree with @Frank Angerano, homeowners insurance. The town or previous owner bear no responsibility. When you buy property here in NY for instance, its as is, and the buyer usually gets a home inspection prior to purchase. If something comes up, its a negotiating tool. There are instances of transferable warranties like on roofs, appliances, etc.

Reading this thread rang a bell for me. In page one Hewas mentioned the keyways are opposite of what the videos show when the marks are all lined up... I suspect the previous owner lined the marks up as per Frank's diagram , but instead of using the exhaust cam to start ( #1 lined up with head gasket ) he used the intake cam. All 3 would be lined up as illustrated , but 180 degrees out of time .

Lol take a deep breath and maybe a step back. To much time at it will make you crazy. My feeling is that spring is exactly what I think it is. But I could be wrong. If it fell down Into the cylinder it could have easily been mangled up in the cam chain into pieces and basically been pumped through the engine. I’m thinking along these lines like I said earlier based on the top end work. I would change the oil a few more times with cheap oil to make sure you get it all out. You can use paint strainers to catch any debris as you drain the oil and re use the oil over to keep flushing the system. Once it’s all clear put a better grade oil in. If it’s just the small spring chances are it’s not going to do much. Go through all the gears to make sure it’s shifting, you can do that just by rocking the bike back and forth and go through the gears. Stick with the timing to make sure it’s correct and get it fired and listen to it run. Take it from there. That pic I sent you is a cam that’s for your machine. The only other option is to pull the engine off the frame and set it on a bench and tare it down. Not sure how far you want to go but it is what it is. Lastly is the previous owner: did he or she give you any background on this machine ? It seems like you don’t have much background history with it as to what was done etc?

@Venom that’s a heck of a write up and a ton of useful information. Metal looks like it was taken down to bare nicely. Keep the pics coming and your progress. Good job. 💪🏻

This could be one of so many things. Engines that blow the bottom end can still run. They knock like a son of a bi*** and will run until the bottom end completely blows apart. If there was very little oil then you must have a leak someplace and that could have caused this ? Check the oil plug and any seals as well as any oily places on the engine. Second item is the timing could have jumped and slammed the valves and piston together either putting a hole in the piston or bending a valve. Third item is the compression release has failed and that’s all it could be ? Based on the low compression I would feel theres a hole in the piston or a big crack somewhere or a blown head gasket. Pull the oil cap off, put the spark plug back in. Do not put the spark plug wire on! Crank the engine and see if you have air pressure coming from where the oil fill cap is by holding your hand lightly over it. If so you def have compression leaking into the engine. You can also spray the engine down with a soapy water solution and crank the engine and look for bubbles. I would do these simple tests first and go from there. Hope this helps.

A couple of things to add. Avoid deep puddles either full of water or alcohol

What part of "your property your retaining wall" do you not understand? You could always sue Mother Nature or start another go fund me web page.