Not sure miles on the cam chain means anything. My KLX650 runs the same style and it has 35,000 miles on them without any problem and nearly no wear after initial seating in. Lots of pure street bikes are in six figures with the same size chains. The HyVo is a tough design that actually wears very little, being in a constant oil bath.

With the damage to the engine I would certainly replace that chain, but from what I am learning chain wear is seldom out of range. It is when the tensioners fail that problems arise.

In a side note - any raised edges left, even with rounding, will be heat risers. That could cause hot spots and possibly future piston damage if they heat to the point of melting aluminum. The piston should become a shop ashtray. The head probably trashed unless someone can weld up and recontour surfaces to eliminate any sort of raised ridges that may not cool properly.

 

Re: Cam Chain: So basically the cam tensioner is set once and you never need to adj it later. If you do have to readjust it, the cam chain is wearing.
I just brought it up, as a possible cause. Sounds like highly unlikely, based on your analysis. Auto-tensioner problem is still on the table though.

 

That was what really surprised me, the new chains on the 650 wore in requiring two adjustments in the first 10,000 miles, from there it was twice in the next 25,000 and never more than 1/4 turn which comes out to about .012". Yes you can hear light ticking with .012" play. I've had street bike riders tell me they've gone 20,000 and more without adjustment.