So I buttoned up the motor with the new piston and leakdown tested it. I gained about 4% - putting it well into the 'acceptable' range. However it's still not quite where I want it and I can hear a definite hiss coming from the head. So off came the head and out came the exhaust valve since it was the most proximate to where the hiss was loudest.
The best way to prevent the loss of ferrous parts is to keep them bundled together with a magnet. In this case a rare earth magnet out of a harddrive.
After pulling the valve I checked for burrs, carbon buildup and any obvious damage.
The valve seats looked good and I didn't see any damage to the valve. There was a bit of carbon buildup though. The valve itself also had a bit too much play in the guide. It rocked back and forth about half a millimeter, which is WELL over the limit according to the FSM spec. A new valve will be taking its place soon.
I cleaned the carbon buildup from the exhaust ports. I'm debating on whether or not to port the intake and exhaust tunnels.
On a very serious side note, it is always good practice to wear safety gear when working on bikes; gloves, protective glasses, etc...
Little did I know that in this case the requisite safety gear for valve spring removal includes a cup. Yes, a cup, like the ones baseball catchers and football players wear. I had the valve spring fly off and nail me straight in the barracks. That put an end to my night. Recovery beer and a good night's sleep and I should be good to go at it tomorrow.