Good work getting this far, keep your head up and look forward to that first ride. I picked up a 07 KQ 700 2 months ago with a blown motor and am now just getting down to splitting the cases for my crank rebuild. It's been fun, but you have to patient to get through the challenges. I found your post during the work and now realize there is a small group of KQ 700 owners. Your posts here are some of the most informative out there, thank you!

Maybe the rotation of your carb affected the sealing nature of the choke connector's threaded nut? Depending on what year your Bayou is, it may have a Mikuni with a choke connector that is a plastic housing for holding the choke in the carb. My 1996 Bayou 300 had worn threads over the years and caused the connector to come loose and leak air. OEM replacement fitting was unavailable and a China knock-off didn't fit correctly(design didn't allow the threads to turn independent of the internals.) Check to make sure that choke connection is tight, without it connected tight, it will run terrible. Maybe the rotation of your carb affected the sealing nature of the choke connector's threaded nut?

well, I think I finally found the issue. I first tore down one side and pulled the after market cv axle to compare vs the oe I still have on hand. They are nearly identical. No differences in the areas where it mates with the differential seal. So I went ahead and ordered another seal to compare with each axle. It mounted the same to each axle. Looking at the opposite side that wasn't torn apart, I could see a gap between the axle and seal that shouldn't have been there. The seal and axle weren't mating properly (obviously that's why it leaked) but it was because the seal was installed incorrectly. When I pulled the old seals I didn't pay enough attention to how they were mounted and when I put the new seals in, I set them flush with the differential. that's the issue. They need to protrude about 1/3 of the way out. there's a collar on the seal that shows just how far to install and I missed it. So, I now have one side done, waiting on the other seal to get here and I'll finish it up. had I not ordered a new seal to compare, I never would have seen this. 3 pic, one is the improperly installed seal as it sits flush with the differential, another shows the profile of the seal where you see the collar and the last shows the seal installed correctly.

The manual says you should have a 6 or 7 plug, and the gap is 0.025 to 0.031 of an inch. The 8 is a cold plug and will perhaps get fouled easily.