Thanks guys. I've had time to start digging into things here and on the Kawasaki 2-stroke forum on TT and have a better grasp on what I'm doing now.
For the time being I've decided to just get the bike fixed up and running stock and go from there. I wanted to stick the engine in an 03-04 frame for the better handling but it seems those year frames aren't easy to locate so I'm just going with the '98 frame for now and see what pops up later.
Starting to strip the bike down to the frame. The last owner never washed a thing and this bike is disgusting but so far most of it seems to be in surprisingly good shape under the grime. The bike sat in a barn for awhile and the cylinder is locked up. I've got the head off and the cylinder bolts and PV link out and the piston is rusted to the cylinder so I'm soaking in PB Blaster for a couple days before I try to force it loose. I'm sure the Nikasil will be pitted from the rust so I am trying to decide between just getting it plated or having Eric Gorr work his magic with a 295 kit. I'm also certainly going to want a new crank, seals and all bearings.
The oil in the thing looked great and the coolant was perfectly clear blue when I drained it. I haven't found anything broken/missing except the whole front brake assembly is missing and the clutch lever and cables are trashed. It is pretty much bone stock except bars and stickers.
Once I get going and get more pics of progress I'll start a build thread.