On my sons Lite 340, there seems to an awful lot of oil residue coming out of the air cooling outlet if that is what you call it, above the clutch gaurd. Is this norm or do you think I have a bad head gasket?

check for a loose plug, then look to base and then head gaskets. my bet is a loose plug.

all the above and also the exhaust gaskets. there may be 4 exhaust gaskets, if the shroud is sandwiched between the y pipe and cylinder. I ca't remember if the 340 is like that, I know the 488 fan is. Also check the y-pipe.

http://www.partsland.com/index.cgi?N=11316...8-LITE-CYLINDER

here it is, I think I will replac ethe gaskets and retorque the cylinders