I have an early SD which was KTM's UK press bike and has also been the prototype for the Superduke Battle series after which its been my track bike for a number of years. So its fair to say its had its fair share of abuse!

When I bought it I was told that the heads had been gas flowed and skimmed by H&M.
Winter of 2009 / 10 it has a top end rebuild and was making 116bhp at the rear wheel on Projex dyno.

This spring I bought and fitted a 2nd hand Evo system and we removed the airbox completely and it made 125/6 at the rear wheel.
(A YoYoDyne slipper clutch was fitted at the same time)

Project have recently fitted a set of Tornado reprofiled cams and removed an Intec back torque limiter as it was surplus to requirements.
The cams should have lost us power below 6,000 and made more power above 7,000
The power and torque curves were identical in shape but made 121: a loss of 4 or 5hp.

Kev refitted the stock cams and we dynoed the bike at 114bhp.
Which is a bit of a worry.

Below is a picture of one of the heads taken when I was lapping the valves in Christmas 2009.
Can anyone tell me if this is a stock head or a gas flowed one?

Anyone got any suggestions as to what's going on and what I can/should do about it?

Thats a hard on with the bike having so much history!
Regarding the porting you should be able to tell if this has been done by looking at the finish of the ports for shinny areas or a roughened surface, you should be able to see this around the valve guide as this is one area that is most usually cut away to unmask the valve, if the ports still have a smooth casting finish everywhere i would say the heads have not been ported.

To check if the heads have been skimmed the only way is to measure the combustion chamber volume and compare the results to a standard head.

One other thing, its not a good idea to lap valves using grinding paste on a modern engine (you can loose power!) what you want is to have a nice three angle valve seat cut and replace the old valves with new ones IMHO

Id check the easy things first: compression, clutch, filters and plugs.