Martin, even without the groove in the bore, there are other issues that would contribute to your high oil consumption ( and not necessarily adversely affect your compression test results ). There's 'tattooing' on the walls from oxidation forming between where the piston stopped, and the bore. Usually, this occurs when the bike is stored for long periods and not prepared properly ( putting a bit of oil down the spark plug hole and cranking the motor through a few times). When the piston passes these regions, on the upstroke, oil is deposited in the depressions. As the piston descends, the rings cannot scrape the oil off the bore. As a consequence, consumption accelerates. Good news? The big bore kit will, easily, correct for this
As we've discussed, on my '82, I'm running pod filters + 1147cc. + 6-1. I have a Dynojet stage 3 installed ( 124 main, 35 pilot, needle in second position from the top ). I dropped the needle from the initial middle position, as it was running slightly rich. My plugs look pretty good now, and I have no fuelling issues from idle to redline
On a good day I'll be nudging 200km. before having to flip to reserve. Generally, I have to go to reserve at 180km., and that's with my accel. pumps adjusted on the low side of the scale, and trying to 'roll' through the throttle and keep them from activating too much.
Again, it seems odd the valve sealing concerns weren't indicated with your leak-down tests

I know my #3 has,minor, issues with exhaust valve sealing. It wasn't apparent with a compression test, but was a few points off on a leak-down test. I just put my 'X' to sleep for the season. I should be checking my valve clearances this weekend, and am anxious to recheck them and see how they are doing 15,000km. later. I'll let you know what the results are if you'd like.
....and sees 110 rwhp pretty consistently.
Dave, I've never realized that our bikes could be coaxed to produce numbers like that with the mods you've mentioned
