Hi there.
We had a couple of the KTM 250/350 engines with that issue. The clearance between the castles on the flywheel and the cps is very small and and at some point the castle tip will rip the cps to shreds. As I remember it, the KTM factory said that this was caused by a too high oil level. How they came to that conclusion, I cannot say, but since doing the recommended level adjustment, there haven't been any more issues.
The usual issue with overfilling of oil, lies in the incorrect procedure for checking the oil, so first of all the correct procedure must be followed to get the correct reading from the sight glass. And also when doing an oil change, the correct procedure must also be followed as doing it wrong also causes overfilling, especially if you just stick to the quantity stated in the manual, and not bother to check the sight glass at all. And I have worked in more than one bikeshop, and I have never seen any other technicians following the correct procedure of changing the oil. Apparently its just too much trouble.
This problem doesn't seem to affect all the KTM 250/350s, but the recommendation was that the oil level be slightly reduced in all the bikes as a preventative measure.
When changing the oil, the bike should be drained of as much oil as possible,with the drain plugs and oil filter/s out, the bike must be cranked or kicked over a couple times, with the kill switch pressed so that the bike doesn't start, so all the oil in the oil ports can also be evacuated. Some don't do this procedure to drain oil, but they do compensate for the oil still left in the engine by reducing the quantity of oil that gets put back in.
Myself, as an example, change my oil every 3 to 5hr, depending on the discoloration of the oil, and I change the filter only every 2nd oil change. When I don't change the filter, I don't clear the oil ports and the oil filter cavity also has some oil left, so I would put only 800-900ml of oil in, as opposed to 1 liter of oil on a complete drain.
The factory recommends 1.2 liter of oil for the 250/350 bikes, after doing a proper oil drain.The oil level should then be at the lower level of the sight glass. When checking the oil, the bike should be started first and left to idle for a minute or so, so the oil can circulate through the engine. Then the bike should be stopped and left for a minute or 2, and then you can look at the sight glass for the correct level.
It might seem tedious,and I can understand why some would not do it the correct way.
I would believe that most on this forum will be doing it the right way, because checking the oil level the wrong way on a HusaberG(not talking about the KTM clones here) has some comical but panic inducing results, and I had experienced this first hand when I was still unfamiliar with my Berg.
((I used to have a Honda CRF, and those we would purposefully overfill by a wee bit, the counter balancer seemed to last longer that way, but on my first ever oil change on the Berg I had done the same, but the Berg did not like it all...
))
