A dropped/loose exhaust valve seat would also cause the symptoms described.
It turns out, my 350 Bullet ran about with the valve seat flapping in and out of the head occasionally for about a year. Occasional drop in power then pick up again, I'd also sometimes come out to start it and therte would be no compression at the kick start but repeated kicking over would see it fire and start running. After some time, it started popping a lot on the overrun.
Effectively, it was working normally but sometimes the valve would open against the seat and sometimes the whole valve and seat would open against the head. Occasionally the seat would stick out, holding the whole lot open until it fired (or was hit by the piston?) and re-seated again. Over time, the exhaust gas ate away at the alloy in the head leading to a chronic air leak (and popping on the overrun).
This only came to light when I stripped the head ready to lap the valves (assuming, correctly, that there was a leak round the exhaust valve area causing popping on the overrun), put the dismantled head on the table and heard the *dink* of the valve seat hitting the tabletop.
