The motorcycle has 30,000 miles and I started having problems with the oil light coming on so I changed the oil andin the process found part of a piston ring and didn't think much about it until oil started leaking from the head gasket and loosing power.
This statement makes me wonder if you did loose a piston ring, that would definitely effect the power of the bike - and set the path of your restoration (top end rebuild). Can you give us a history on the bike, specifically did your father have any problems with it before he gave it to you? By the sounds of it, he gave it to you knowing that it needed work. I would start with a compression test - it is outlined on page 23 of the Clymer manual (6 edition - 21st printing), this will indicate the general condition of the cylinders and valves. Or there is the leak down test - this will tell you if you need to replace some rings. You can search any of these terms on this forum and read how they did it. You will need some specialized tools to do this. Or you should be able to find a machine shop\motorcycle shop that would do these tests for you.
But the number 1 easy and free thing a noob can do (I'm a noob too), is read! This forum is a wealth of knowledge, everything you are experiencing with your bike - someone has too - and fixed it. You need to read the engine FAQ section on this forum here:
http://forums.sohc4.net/index.php?topic=369.0, it also has a link to another post describing how to replace a head gasket.
I love reading the project section of this forum, even for other bikes - one it gets me fired up to work on my bike, two it shows me what I problems I may encounter, third it saves me money. The thing that kills motorcycle builds behind getting married or having children is running out of money. So take your time, research your next steps on this forum BEFORE you buy the parts, and most of all have fun learning to fix it yourself. Our motto here is: "Built not Bought".
To add to your reading assignment, I've uploaded some manuals I found in my internet travels:
CB350F Parts Manual
http://www.mediafire.com/file/tnzzcy5zwj5/350F Parts Manual.pdfCB350F Shop Manual
http://www.mediafire.com/file/iqoz0nuynez/350F Shop Manual.pdfCB350F Owners Manual
http://www.mediafire.com/file/byazmtzmudy/honda CB350f owners manual.pdfHonda Tool Manual
http://www.mediafire.com/file/yyd1jgd1qiz/honda common tool manual.pdfHonda Common Service Manual
http://www.mediafire.com/file/yyd1jgd1qiz/honda common tool manual.pdfAnother forum that is fun to read:
http://www.dotheton.com/forum/index.php?wwwOh, something I noticed in reading these forums. You need to post pictures if you want replies. You cannot have too many pictures - open a photobucket account and use the IMG tag to copy and paste into your posts. It is all explained here:
http://forums.sohc4.net/index.php?topic=14605.msg93296#msg93296Good luck and have fun!