John
I use just a little RTV around the outside of the main seals ( all of em)
not a heavy coat.
After you get the engine running you should follow the timing
procedure in the manual. Yes the slots in the stator is the
adjustment and yes you can advance and retard it somewhat
from the factory setting. People seemed to always want more advance
than spec, don't get too wild if you go for advance.
For what it's worth ( about nothing) about 4-5 years ago I borrowed
a dyno and did a fair amount of testing on the Kaw I was running. With
the pipes I had, my motor actually made more peak power (little bit ) 
with the
timing retarded from spec, goes against convention and I have no
explanation other than the rest of the setup maybe wasn't optimized to take
advantage of the more advanced timing.
You could spend a LOT of time playing with a dyno trying to chase
the variables.
Dave Phaneuf
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