Just thought I'd post a little update seeing as we seem to have resolved the issues now.
My mechanic friend believes that the KTM workshop opened up the head, replaced the 2 intake valves, realised they didn't know what they were doing, stuck everything back together (without replacing the head gasket), wrongly set the timing chain and the valve adjustment. Also the throttle position sensor was a mile out set in the complete opposite setting.
Long story short, we had to replace the head gasket as there was signs of radiator water getting into the head. Whilst it was opened, we overhauled the water pump but all the rockers and cam follower bearings etc were fine, no play at all
So the list of work done would be something like the following:
Chain/sprocket replacement
New air filter (old one was actually disintegrating)
Fork seals
Throttle position sensor adjust
Top end overhaul and gasket
Compression test - all good
Intake valves replaced
Water pump overhaul
New radiator fan (bearings were seizing, not 'cool' in Malaysian temps..it's now wired to be on all the time with the ignition)
New battery
Wiring around the radiator was damaged which was causing the frequent fuses blowing - repaired
Accessory socket connections were the wrong way round...adjusted
So all in all, quite a bit of work was needed in the end (not helped by the KTM shop..)
Took it out for it's first proper run yesterday (after checking the headbolt tension last week after a few short local runs), did about 200kms and no issues
However the non-original (no name) exhaust is bloody loud and is still popping on deceleration. Won't change it straight away but think will look into alternatives, any suggestions for a replacement can?
It was doing 160km/h at 7,000 rpm. But still think it could do with a bit more 'oomph' in acceleration although it's way better now. Is replacing the can essential or can this be done by removing the snorkel and changing the jets?
ps thanks for the great info, all of which was useful
pps after a couple of out of town rides and some dirt roads, fuel economy was around 19-20km/L which is up on the previous 13.5km/L when it wasn't running well