To start, I would go from the top down. Check to see if you can turn it over by hand before anything....figure out if its seized or not.
Pull the valve cover, check the cam for wear/damage. If you can run your thumb over the lobes and feel any damage your F****D! (in the words of the local harley shop guy)
ha
if you're planning on rebuilding either way I'd cut the cam chain, and move downwards. Check that valves and seals. Then get to the pistons.
If you pull the pistons, hone/bore the cylinder walls, replace the rings and all gaskets in the top end you should be set up for a solid runner.
I believe that a stock engine produces right around 50HP and a bit more than that in torque. However it is very possible to punch these out to a 700cc with some upgrades, however I am 99% positive you need new sleeves to do that. I've actually heard of 800cc engines on the euro versions....but never actually seen one