talked to the dealer.he told me he would do a leak down test if i wanted.he noted that the bike was doing this.he made the suggestion to drive it for a couple of years and then have it done before warrenty is up.i like that idea.when they do the rebuild i will go for 113 parts and have them installed for free.
Shouldn't convert a 110 to 113 because the case has a lip machined in for the o-ring on a 110. 113 does not use the o-ring and will have too little gasket sealing surface at the bottom of the cyl. This is why the SE book states 113 parts are not for bikes that have been 110's. Also, you can get the same power out of the 110 as the 113 so it's no loss.
The description of puffing at startup and going away right away indicates a possible valve seal.
Leakdown tests will not show this.
Upside down 2nd rings usually make mosquito foggers rather than start up puffers.
Make sure that you aren't overfilling the oil. Many people throw in 4 qts at the oil change and that makes them about 8-10 ounces overfilled. They then keep noticing oil go away on the stick, but the oil is just being vented. Should only be adding 3.5 quarts at the oil change.