Water Leak

[Gnasher]

I think the leak was coming from the outlet on the cylinder wall. I removed the pipe and expected fluid to run from the spigot. Instead it ran out of the pipe I had removed. Surely the water jacket around the pistons should be higher than the spigot level?

Not sure what you're saying here?  Pictures would help

I've never known any serious problem with the cooling system on any Jap bike that's not been abused.  Leaks are 99.9% of the time hoses, unions/nipples and or the clips that retain them.  The surfaces of unions/nipples corrode over time and leak, or the hoses crack/split either due to age or owners/stealers pulling them off with too much force.