During a little practice, had a big little problem.
Can you spot the issue?
How about a little closer?
If you followed the valve adjustment article you should see the problem. Seems the lock nut decided to go for a walk and the adjuster backed out. Symptoms were a loss of power, and loud clicking from the valve. Thought it was a bent valve from a missed shift, but turned out to be this. And this wasn't an isolated problem today, my brother had the exact same thing happen. Finding the nut proved difficult. I tore down the timing cover, the cover over the flywheel and pulled the flywheel, drained the oil and poked around with a wire, the nut was still not to be found. Finally pulled the head and it fell out. Looks like it was lodged behind the cam chain guide on the tension side (exhaust side of the head). Pulling the head freed the nut and it fell on the floor. At least I didn't have to split the case to find it.
If you right click and view the image, then magnify it to full size, you might see what the problem was. The rocker arm isn't flat where the lock nut screws down. You can see small spots where the nut scuffed the rocker. Should be a nice continuous ring of contact. My brother's has a single small spot of contact and we both tightened these more than they should have needed. I think the quick fix will be a brass washer that can crush slightly to gain better contact with the rocker. Also going to need to add a bunch of Loctite which normally isn't needed on this type of adjuster.
Since the carb and head are off, I may do a bit of clean up work of the ports. The valves are horribly shrouded, there are casting flaws in the intake manifold and the head. I think there are large gains to be had, and it was running great before this problem with the lock nut. Hoping it will really go after a little clean up. This will be a SkunkWorks article as I'm not going to do things the normal way. I was going to wait for an ebay head to arrive, but looks like I'm going to start early.
 We were able to fish the nut out of my brother's bike without taking more than the cam cover off the side of the motor (o-ring gasket). It was down on the tensioner side of the chain, and was well worn away from rubbing on something. Glad we found it so "easily" and hope the metal fragments don't cause problems down the road. Waiting for new adjusters and nuts to arrive before they can go back together.
[edit 2] The moral of the story seems to be, get as much of the Chinese components out of the motor and put is as many Japanese (Yamaha) parts as you can afford to do. Might have to build a Stock 100 or Stock 125 class machine to contrast the costs involved, but I'm getting a little sour on these machines. I'm sure that will change once I'm riding again, but part after part in this valve train seems to need to be replaced as I fix one thing or get a part to fix one thing, I'm finding the receiving part is damaged too. We aren't sure about the washer fix under the locking nut. Need to watch it closely. Mine is getting TTR rockers because one is damaged and the adjuster does not hold position without wrecking the threads. Good thing it was a used adjuster. Hard to sort the wheat from the chaff right now. It's been reccommended to replace:
Not much left of KAYO in there and you are looking at more than $300 in parts, plus labor if you can't do it yourself. You'll also need a couple of tools that aren't real common, a small slide hammer to pull the rocker shafts, and maybe to pull the cam. You'll need gaskets and seals. You'll need a valve hand lapping tool and compound. And while you are doing this, you might as well clean up the intake and exhaust ports and polish the combustion chamber. Then set the squish and maybe shave the head or cylinder to get the squish correct...
Hoping that KAYO reads this and improves their quality controls. Maybe they've already done this since my bike was made in January 2015. Maybe they will be kind enough to contact me and offer to send newer style parts that are just as good as the Yamaha stuff (which isn't that much better to begin with).
I'll add more on the washer under the lock nut as we gather data, might be a good fix, might not work at all.