I'm the third owner.  Owned it since September 2022.  Bike now has 5,600 miles on it.  On a February ride when it was 30°F out the coolant temperature was running high while at stop lights and the cooling fan was running a lot.  Get back to the fort and notice oil all over the rear fender.  

Since I owned the bike it would burn oil on a cold start.  I knew about these Duke Gen 1's having a head gasket problem going in.  I put about 2,900 on it before failure.

First I did a compression test and had 130psi.  This is low but after speaking with two different mechanics at KTM shops learned the exhaust cam has an automatic decompression lever.

Next I did a leakdown test and after lots of attempts getting TDC right it had good pressure but it decayed after 10-15 seconds.  Not sure if this is expected or not.  

Then  I used my borescope and checked the cylinder walls and cross hatching.  The cross hatching looks brand new and I can only see one small vertical scratch of note.  I did notice oil draining near the head gasket on one side.  I also see a lot of carbon on top of the piston for 5,600 miles.

Finally drained the oil and the verdict was clear, coolant in the oil.  Sent the oil off for a lab analysis and received the results back today.

Confirmed coolant and fuel in the oil.  The oil viscosity still in spec though.  High levels of iron too.  Would this be from the clutch steels?

With the pictures and oil analysis results, should I attempt a head gasket replacement and deck the cylinder and head?  What other top end components should I replace?  Automatic timing chain tensioner?  Water pump seals?  Only the rod connecting to the crankshaft has a friction bearing, everything else is ball or needle bearings.  I want to leave the bottom end alone if possible.

Neither KTM shop said they would work on the engine.  The one mechanic lead said he sees repeated failures after head gasket replacement including transmission failures.  He won't touch Gen 1.  So this will be up to me to DIY it.

I would rebuild it. Tear it down to the point you can check to see if there is any connecting rod play. If that checks out might as well put a fresh piston and rings in, timing chain is a good idea if you don't mind removing the stator and flywheel.

Adjust the valves when you are done with the rebuild.

I will definitely check valve clearance before teardown to see where it is at.  I don't believe I can get the timing chain replaced without splitting the cases.

I'd do rings and the head gasket,  that's it.   It doesn't have any milage on it yet,  chance of timing chain being stretched or the guides worn out are near zero.

Absolutely rebuild it

Checked the valve clearances and I can fit a .004" feeler gauge under all four cam lobes easily but not the 0.006" gauge.  

That is in spec for the intake (0.0031"-0.0047") but the exhaust needs (0.0051"-0.0067").  

My feeler gauge leaves progress in 0.002" increments, so I ordered another set of feeler gauges last night with thinner leaves.

Fill the crankcase full of curry.
https://www.motorcyclistonline.com/long-term-ktm-rc390-blown-head-gasket-repair/