I did it for my H2, and use Viton O-rings. You do need to account for the lack of a head gasket, but if you're CCing and squishing your heads that's easy to do. If you've already done that, I guess you'll need to do it again.
The Parker O-ring handbook will give you the dimensions you need. I used my lathe to do the work, and used a square-ended HSS tool that was maybe 1/2 the groove width. If you try to make the tool the groove width you may have trouble with chatter. I'm pretty sure I would. I made a tool to hold a head from of an old spark plug body and steel bar, but there are several ways you could hold a head in the lathe, including four bolts and spacers, and a face plate.
It's a shame that Kaw didn't use O-rings originally. They're way easier to use, and absolutely don't leak. You can pop off a head to inspect things any time you like, wipe any dirt off the O-ring, groove, and mating surfaces, and put it back together in a couple minutes and you don't even need a torch!
