Thanks durielk.
This bike will live the rest of it's life as a dual sport. No more rear rack with a box on it, no more winter riding, a little bit of commuting, and a lot of trail riding.
Talking with my friend about the frame rusting out, we think the real reason it happened was the continuous cycle of hot and cold it went through in the winter. That continuous cycle probably caused a lot of condensation to form and let it rot from the inside out. We think this because when we took the bike apart, there was only one hole and a tiny one at that back near the taillight. The more the frame got handled the more the holes appeared. And I found the large one when I stuck the air nozzle down the frame and realized there was air coming out somewhere. A wire brush quickly wore away the last exterior layer and exposed how large the hole actually was.

 

How is the rest of the frame? Could rust be more pervasive?
We use an ultrasonic thickness gage to measure pipe thickness. I'm wondering if you could find one around to borrow or rent to check the rest of the frame?
T Mike ES Standard Ultra Thickness Gauge with High Speed Scanning and Alarms Alkaline from Davis Instruments

 

Rust sucks! At this point I would replace it. Many nice ones on eBay with paper work for $300 to $400.

 

I think you'll use the rack more DS and trail riding, I always take quite a bit of stuff with me due to ... I'm alone, far, far, away. If that rust happened up around the engine-fork-box I wouldn't mess with it, get a fleabay one, much easier and you already have it dismantled, that's got to be 45% of the work done.

 

IDRIDR - w/o that (HOLY CRAP IS THAT EXPENSIVE) tool I can only guess. I did use a crappy scope and the rest of the subframe all looked "good". The main hole is a spot that when the bike is on the kickstand tends to be the lowest and level, thus a collection spot for moisture. The rest of the frame is amazingly in great shape.

s10gto - I agree rust sucks. Most of the frames that I've found with a title(which I need) are crazy expensive or are for the gen 1 KLX. I just need the repair and frame to make it through the summer. After that I might try and build my own subframe next winter. It's a crazy idea but I'd like to test my skills and ideas.

durielk - I hate having a rack on the back when off-road. It only took one set of whoops for me to painfully discover that. I use an Ogio Flight Vest and Wolfman enduro tank and tank saddlebags to carry all my crap.

 

Yes, they are pricey.
I found a used one on ebay for around $500. We use it fairly regularly.

 

Great post, this is Zen and the Art of Motorcycle Maintenance personified. Best of luck my guess is it'll run like a champ for many more miles and will be worth every cent and the time enjoyed doing it.

 

I think it's time to re-read that book. I haven't read it since I bought my first bike.
So my Porsche/Mercedes mechanic buddy took my frame home with him to repair. It'll be cheaper and he'll fix it as well, if not better, than anyone I'd be able to find.
And he brought me a 5 gallon bucket of parts cleaner!!! So I bought a quart and gallon paint can with lids and a 5 gallon plastic bucket with a screw top lid to split up the cleaner. The stuff is pretty amazing. I spent a lot of time cleaning parts. I dropped the head in the 5 gallon to let the cleaner take off all the carbon build up. I'll clean and rinse that tonight so I can start lapping the valves.
I have all the head parts ready to go once that is done.
I do need to find a spring compressor because I will not be able to put it together the way I took it apart. I used brute force to compress the spring while my magnetic tool was attached near the keepers to draw them out. Like you might've seen in Mr. DuhFactor's vids on YouTube.
I still need to measure the cam chain and see if it needs replacing.
Other than that I'm down to cleaning and taking care of the rest of the bike parts.
And I'm sure I"ll be placing a few more parts orders. I wouldn't mind getting some of those camo side panels from the 2018 KLX...
I've also decided I'm grown up enough to have a hydraulic press. It won't get a ton (pun intended) of use but I've found the need for one at least a couple times a year, so I'm ordering a 12 ton press and a bunch of bearing drivers to finish up the bottom end.

 

Everybody loves the pictures. Just a few random shots. If I get back into work this weekend I'll post more.

After three days in the parts cleaner...the pivot looks like it might be replaced. That bearing, or what's left of it, geez. We'll see what the press can do and what it looks like after.
That missing coating was everywhere in the bottom end.

Put a mark on my cylinder.
I want mine back. No good reason, but I have a few, and you want what you want, right?
Main reason is aging...I don't want a new shiny cylinder in between the top and bottom end. I'm trying to keep as much of the 64,000 miles worth of patina as possible.

 

Are you going with a Bill Blue 351 big bore kit? I know I love mine, you won't regret it.