Sounds like you have a bad valve guild in one of cylinders that is leaking 
oil and burning , that will give you blue smoke ! I went thought the same 
thing on my 83 650 . I found it easier replace the head from a bike with 
low miles on it , if you can find one ( ebay ) they do make rebuild kits if 
you can't find another head . I did end up rebuilding the whole top end and 
it has been running great ever since.

On Tuesday, April 23, 2019 at 11:03:31 AM UTC-7, aajawo wrote:
>
> So a few weeks ago I purchased a 1983 NH 650 to restore.  It has 17k miles 
> and hadn't been started for years.  I installed new battery and rebuilt the 
> carbs.  The compression with cold engine was 130 PSI for all cylinders with 
> throttle closed (forgot to hold it open). At first it started up and ran 
> fine.  Now it's blowing blue smoke out exhaust.  Rechecked compression with 
> warm engine and open throttle and all cylinders at 120 PSI except number 2 
> at 100 PSI.  Can anyone office advice on where I should go from here?  I 
> figure the top end is toast and needs an expensive rebuild with new pistons 
> and rings if not more.  Oh and I've never ridden it.  All this is with the 
> bike sitting on the center stand.

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