Sorry head gasket. Looks like it's weeping from the front(pucks possibly) then runs around the fins. Also notice the gasket itself looks wet all the way around but not dripping at all underneath.
Thanks HM, I'll go through everything again. Do u know what the stock clip position was on the needle? 4th down?
Most of the '76 K bikes were 4th down, unless they have the #27301 needles and the #110 jet: then they were 3rd notch. You can see the needle number etched on the side of it, near the clips (tiny!).
