Just picked this bike up 2 weeks ago. I pulled the carb apart and checked the jets and set the float level. It's still smoking like crazy and not pulling very hard - 1st & 2nd gear feels like they're only 2k rpms tall. I suspect that it's either not getting enough air, or too much fuel. I ordered new top end parts, but haven't had a chance to look at it yet.
If anybody has any idea of things I should check out or similar problems I could really use some advice.
I recentally picked up a 90 kdx 200 and it has the exact symptoms as yours, short powerband and some blue smoke. i figured it had low compression and I am saving up for a new topend. Keep us posted when you get your problem solved.
I was out riding this weekend, and some of the people behind me said it smelled like motor oil...... if there is anything it could be other than the seals on the case please let me know.
Also, my float level is correctly adjusted and I just replace the valve needle but the carb's overflow still leaks alot. A friend suggested that the o-ring at the top of the bowl is probably the cause, any ideas?