I dug this up from some saved notes:
Poor Fuel/Premix - 91 pump fuel now has 5%+ of Ethanol and that attracts water is not consistent. The OEM head/squish band on the LT500 is prone to detonation.
FIX: Race fuel is recommended w/Good Oil (Castor 927).
FIX: Have the head squish band cut by Tudor, Hall Precision Racing, or other LT500 builders.
Today's pump fuel is crap and increasing % of Ethanol is making it worse. There are some LT500 owners that have kept their machines together on nothing but pump gas.
Since around 2005 or so, my Zilla has always had a blend of pump/race fuel to bring up the octane, trying to prevent detonation that will destroy your crank bearings. I have always run the Mikuni carb, so I can't comment on the PWK. If you search around you will find many people have switched to a modified Mikuni to help eliminate this one area when trying to get their Zillas running better.
Also, you might want to check and see if the rebuild included OEM thrust washers. The OEM ones are known for breaking and tearing up your engine. Replacing them with a set of aluminum washers w/ a RM250 bearing can save your engine.
Again, spend some time reading thru the information on this forum and you'll find lots of tips to help you with your Zilla. Here is a post I put a few years ago going over some of the basic mods every Zilla (and 250) owner should perform:
http://www.suzukiquadracerhq.com/2-stroke-tech-talk/building-a-reliable-zilla/msg2110