As promised, here are some pics of the bike being dismantled.

http://s1022.photobucket.com/albums/af344/thirduncle/

Far out Nnnnnorman , your getting in to it alright , and looks good too. Check this bike out . Its for sale on trade me ( has chucked the chain and broken the c/case and has a knackered starter clutch ) looks a lot like yours

it does look like my old bike. i like the black and gold scheme and am keeping mine like that.

just like the old John Player Special Lotuses. The JPS stickers are missing

G.

if you look at those old lotus formular one cars they looked great.

Yeah , my Dad used to take me to Teratonga when I was a kid , to see the formula 5000. Back in the days when you could wander round in the pits of current world champions..... good days

one of my hobbies is sneakin in to the restricted areas at events and rubbing shoulders with the various types you can find in such enclosures

Do check valve guides & valves for wear & straightness.

nnnnnnorman in Pic 5 your rear shock looks a bit tired

nnnnnnorman,
It looks like your heads have succumb to the same heat distortion problem that mine did about 11 years back. I was giving mine a winter overhaul and noticed exhaust gasses coming from between the head and barrel on the rear cylinder. I tried tightening the head bolts but the leak was still there, so off came the head and that's when I found the sealing surface on the head had distorted adjacent to the exhaust valve just like yours looks in the first picture.
At the time I rang around a few ducati workshops in Melbourne and found out that this a common issue with the 906/907 and it is caused by a poor designed head, there is not enough alloy between the chamber and the cooling jacket. I think it was Lee at Cafe Racer said that he had come across this problem before and had tried a couple of different fixes to overcome this, such as, using jacking bolts and welding in more metal inside the water jacket but he said neither were very successful. He suggested that my best option was to either get the heads machined or live with it.
Not content with those options I came up with a plan to machine up a lapping block and lap the sealing surface on the head flat. It took a few hours and lots of perseverance but I eventually got them back to an acceptable level. Last year I stripped the motor down for a full rebuild and there was no sign of the distortion happening again.

thanks ken and everyone who has had a look. its a learning curve for me as my mechanical skills run to a great dismantaler!!!!!! i rely on help and more help and good advice etc when things have to go back together. what ken says sounds about right as my oil leaks started after i over heated the bike quite badly one time. since then she leaked oil from below the headers and slowly used coolant as well. thats why i took her off the road for some tlc and i just hoped it would not be to bad or get to complicated. it looks as if the ehgine has been rebuilt before as all the cases have been split and re sealed with black sealant. on intial checks all seems tight and good inside. without splitting the cases i could just trust all is ok and check and remedy what is accessable with the cyliders off. i will check the valve guides etc.
as for the rear shocker, yes i had got used too and adapted to a bit of a spongy ride so im looking to rebuild or replace that unit. has anyone got a original or replacement shocker or rebuild kit they want to sell? the front fosrks always seemed fine so new fluid is gonna go in and that'll be fine. the rear being replaced or rebuilt is going to make such a difference along with modern tyres i can not wait to get it back together and out on the road. much as i am enjoyig the ST2 and its refinements.... i miss my 906.

There is a related thread here might be useful

Hi Nnnnnnorman What sort of shock does your paso have , mine had a mazzochi duo shock that responded really well to a strip down , clean out and new oil, a messy job but not difficult, And I think maybe englishstiv might be having you on .... there are a lot of tyres in that photo .
I was advised that the cylinder head / barrel sealing surfaces ( not the o rings , but the actual cylinder/ head compression sealing surfaces) can be lapped using grinding paste and paitence . I have not done this but am thinking about it . I geuss the lapping would depend on how much out of true things are. If its more than a few thou it might not work to well