I did a compression test today, and it looks like I am right at the service limit, 85-90 psi. Does this just mean I need to adjust the valves (hopefully?) or should I take it apart and check the ring gap/etc too. It is a '98. It does start and run OK, but it seems like you have to leave the choke on for quite a while and then when it gets warmed up it has a little bog at take off.

These sleds are cold blooded. You have to wait for them to warm up completely before riding. you may want to take the carb off and clean it as they get gummed up. Alot of people do not clean them as you need to take the carb off the sled to do it. I suggest you do it and change the oil too.

I pulled the head off and inspected it. The valve springs are squished (1.150-1.155"), and I can see the intake valve isn't sealing. At the very least I think I need new valve springs, probably new valves too. While I have it halfway apart, I should probably put a new piston and rings on it too. Does anyone know who has a good price on a rebuild kit for these motors? I saw some kits that came with piston,rings, valves, etc, but no springs, and then others that came with springs, but no valves. If I just buy a set of valves will they seal? or will I have to get them ground to fit the head?

they have a compression release..so 85- 90 psi is right on!

The manual says 110-120 is normal, and 85 is the service limit. I actually checked it again yesterday before I took it out and I was only getting 75 or so. (must have been different temps/conditions than the first time I tested it.) From the compression numbers and the way it was running, I'm pretty sure it needs to be freshened up, and the parts seem to be pretty cheap. I'm just wondering if I should just do springs and rings, or if I should put a new piston and valves too. Also where's a good place to get those types of parts?
Here's one I found with conn rod, piston, rings, valves and gaskets (but no valve springs) for under 80 bucks:
Honda GX 120 overhaul kits

recmotor.com has a rebuild kit with piston,ring's,gaskets,springs... for $108 and these folks are verry helpfull. call them before you do anything and they will tell you if your waisting money or not.

mfgsupply.com has some great prices on parts for these motors. gasket set, piston rings and both valves for about 45 bucks. They don't have the valve springs but the local lawnmower shop has those (in stock) for under 3 bucks a piece. I probably didn't need piston rings but it was only an extra $9. There was enough carbon on the heads and exhaust valve I'm wondering if the red-ish gas that was in the tank was premix. (I was thinking it was just an OD of stabil or something when I first saw it...) The valves I might have been able to clean up and just put new springs on but they were pretty cheap too. I guess it's pretty common on these small motors just to clean up the head and then just use some lapping compound and spin the valve in place to get it to seat, you don't have to have the seats/valves cut.

w00h00! Big box of parts came from mfg supply today. My stuff from rec. motorsports came the other day.
Chain tensioner
skid wheel kit
valves
valve springs
gaskets
new comet clutch (stayed with the stock chain for now...)

Still waiting on piston rings and a locator pin from the local shop, should be in tomorrow.

I got a good deal on this sled but I didn't think I would be doing a down to the chassis restoration on it! Oh well it seems like they're pretty easy to work on. Maybe I'll snap some pics and make a 'how to rebuild a honda GX 120' thread.

OK, I'm getting irritated, maybe someone can help me?

I put the motor back together with new valves, valve springs, and piston rings. I measured piston ring end gap on the new rings, it was in spec, .012 or something, a little less for the oil ring. I did not measure valves guides, I don't have the tools. I spun the valves with a suction cup and lapping compound, and I got what appeared to be a good seat, to me anyway. Adjusting the valves was a p.i.t.a. The rocker arm studs are so small there is a _huge_ amount of slop between when you just tighten the ball down and then when you tighten the locknut down. You have to set it big and then measure again after you tighten the locknut. But I got them pretty close, about .006 intake and .008 exhaust. I cleaned the carb, but I didn't test the ignition or anything...
I put it back together and do a compression test. It's a little better, but not much... Maybe 85 now instead of 75...
Start it back up, it starts fine, runs for a few minutes, gets warm, but then when it gets to the point where it doesn't like the choke any more, if you turn the choke off it just dies... Turn the choke back on, it started a couple more times... Then finally nothing, now it won't even start with the choke on. (it didn't make any 'failure' noises, and it's still rolling over smooth...) It was kind of doing this before (when I first got it), running a little worse (especially at idle) after it got warm, but now it's even worse than it was before! I'm letting it cool off right now to see if it will start cold...
I didn't test the ignition system when I had it apart, but I guess I will now...
I'm also going to look at the valve adjustment again... I also forget to check if the valves I took out had oversized valve stems (do they make them for this motor?), but I guess I'll be doing that now...
Probably I should clean the carb again also just to make sure no little pieces of dirt got in there when it was getting assembled...
At least I should be faster pulling the motor and taking it apart the 2nd time...

This sucks, does anyone have any other tips if these motors aren't running right? Any tips for adjusting the valves or anything I overlooked? I got a deal on this mini (it was running a little rough when I bought it), I was thinking it just needed a 'tune up'... Now I'm starting to wonder if it was a bad idea... I'm usually pretty good at making stuff run, but not 4 stroke lawnmower motors, i guess...

Sounds like a carb/fuel problem, check the filter in the tank,pick up, and clean the crap out of the carb then clean it again! Also found a place nr-racing.com LOTS of stuff for honda motors mostly 160-200 but some 120 stuff also. Thinking about dropping in a 160 (5.5hp) and doing one of their kit's to make it 9.5-11hp!! That will put a HUGE smile on a face and the kid might like it too .

I got it running, it spins like a top now. I think I had a little bit of everything wrong with it, I kind of rushed when I put it together the first time.
I didn't get the valves/head right the first time, I could hear the valves leaking on the compression stroke when I spun it over by hand. Just to be safe, I checked the diameters of the old and new valves with calipers, and I was happy they were almost exactly the same. I actually liked how the old intake valve fit better so I used it instead of the new one. I spent quite a bit more time lapping the valves this time, using a suction cup and 'zip'. After I put it back on I couldn't hear the valves leaking near as much.

I noticed last time the spark was looking kind of orange. The BRP manual shows to use a steel feeler gauge to set the ignition coil gap. I usually don't do it that way, but I saw the picture in the book and I had feeler gauges right in front of me... I set it the 2nd time using 4 sheets of paper, (about .015") and it's closer now. I checked the ohms of everything, and only the primary side of the coil was out of spec, just by a little. In spec is .8 - 1 ohms and I had 1.1 ohms. But with the closer gap the orange spark is gone now.

But I think what made it quit completly was that a piece of the o-ring from the pilot jet got pinched off and was stuck in the carb, it had no pilot circuit. I kind of suspected it was a carb issue when it quit completly, but I was pretty carefull about cleaning it the first time so I was having a hard time believing that anything was clogging the carb... I'm going to order a new o-ring, but it's running now with the old one, not sure if I will change that right away...

The one thing I don't understand, everyone keeps saying that because this motor has a compression relief mechanism on the cam, the compression readings won't be accurate. But the BRP manual says compression should be 110-120. I'm still not getting anywhere near that. In fact everytime I test it the compression is lower, this time (now that it runs perfect) I'm only getting 65..?.. I wonder if that decompression spring on the cam can go bad or something... Now that it ran for a while I'm going to let it cool and test it again, but I'm starting to wonder if my compression testor is going bad...

What does everyone else get if you run a compression test on your mini z?