Ok so Step 1 complete and I could now get Spark. Next step to check everything working ok before I attempt the big fire up.
After setting all the points, the chain tensions, tappet clearances and everything else I read that there was another filter inside the lower crankcase so I removed the sump to make sure that was all clear...
That's when I saw the Primary chain was eating into the engine case...! It was very loose and also appeared to be rubbing on the side of the Cam Chain tensioner which had not been installed correctly. The bottom end of the tensioner should be sitting in a small recess cast into the engine case. You can see in the photo it's missed it completely.
All I know about the bike is that it was an old NZ Police bike and it had been off the road since about 1994. I can tell this because the stock dials and headlight were changed for an integrated set as the speedo's were often removed and calibrated. You can see the different set up in my first photos. If anybody is interested I can post a pic of the different dial the police force used to use?
A bit of research on this forum revealed this is quite a common problem as there is no primary chain tensioner on this model. Once it is worn you basically have to replace it and hope you were lucky enough to catch the problem before it eats through into the oil gallery.
So engine tear down then to replace the chain. Probably a good idea anyway seeing as the old speedo was reading about 85,000 kms.