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Both the 1985 honda xr250r and xr350 look loke they have self adjusting cam chain tensioners. You may have a broken tensioner or tensioner guide. With the age of the bike you may need a new cam chain. There is nothing to adjust so you need to just figure out if the chain is stretched , if a guide is broken, or if the tensioning mechanism is malfunctioning.
your not going to know until it is pulled down and inspected.
You say it wouldnt start then siezed. if it wasnt running when it siezed it could be a cam chain , or a problem with the kick start mechanism.
pull the rocker cover off (it will come off with the engine in the frame) and have a look.
Pull the left engine cover off and see if you can turn the flywheel(spark plug out).
This should give a bit of an indication if there is major internal problems.
The 85 had a real problem with cracks in the head just near the spark plug thread, but this wouldnt be the cause of a siezure.
you can't adj. it the cam chain adj. is spring loaded. if your chain is lose there would be three things i would replace, the cam chain. the followers and the adj.
Given the age it wouldn't hurt please it will give a chance to look over the vavle trian.
It sounds like you have not set the cam chain timing. If the cam is not timed to the piston position, the piston can come up and hit an open valve. If you put the engine together and kicked it over so the kick jammed then the piston has hit an open valve and chances are very strong that the valve is now bent. Bummer... If bent badly enough the valve guide may be cracked as well. Double bummer... I would pull the head off and do a visual inspection of the valves. Do they LOOK fully closed? Can you see a strike mark on the top of the piston? If all looks good, I would put the head back on then set the cam timing then turn the flywheel over by hand a full four revolutions. If it doesnt bind up you should gently push the kick lever to turn the engine over a few times. Okay, the piston doesn't seem to be hittinng a valve. Now do a compression check. You want to have 130 to 160 psi. If you do, the valves are okay. Get back to me by posting a comment if you don't know how to set the cam timing. The following diagram may be self explanitory. Please rate my answer. Thanks.
Remove the spark plug then put the piston at Top Dead Center compression. Look at the position of the timing marks on one side of the cam, parallel with the gasket surface. Remove the cam as you described.