Yeah, 1600 hours on a Kohler is just getting good and broken in. I'd definitely look at the head gaskets before a rebuild. If you do a compression test I'd be willing to bet that one side is significantly lower than the other side. Pull both spark plugs and set the throttle wide open. If both sides have about the same compression then do a leak down test.
Always do diagnostics before you spend a dime in repair.
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