When I was trying to work out if either of the 2 500cc cylinder heads I have, neither of which have the blow by ring, were standard I'm sure a read a thread talking about cylinder heads where it was confirmed that the 500cc D/F/L cylinder heads didn't have the blow by ring, but the 595cc and 650cc engines did. This would seem to be backed up by the various suppliers offering new 500cc heads with no ring.
Regarding the cracks, I also read up on this, if you search the forum there are some picture of other cracked cylinder heads. There were two issues with cracks, one is the risk of the crack opening up and allowing one of the valve seats to move /drop out causing a fairly major engine failure. The second was that if the cracks extend further down into the throat of the port, then you could have air leakage which could disrupt the fuel mixture.
If you have the tools on hand, then removing the valve seats, putting a nice V on the crakc, welding it up, machining back the weld and having new valve seats fitted would be the permanent fix.
Both my cylinder heads were cracked maybe not quite as obvious a crack as in yours but similar, neither extended down into the ports, so for now I'm going to risk it and hope for the best. Chances are it cracked thousands of miles ago and it'll all be fine... Worst case, good job I have a spare engine! haha.
Finally, valve stem seals. As far as I understood it, the O ring should go on after you have compressed the valve spring, between the spring top cap and the collets, see the picture I grabbed off google below. In this way it seals the top of the valve from the oil coming out of the rocker arm and the spring top cap creates a kind of umbrella for the valve stem with oil running down the outside of the spring. The valve stem is lubricated by oil vapour and splashes, but it's protected from the constant stream of oil coming out of the rocker. I have fitted valve stem seals to all 4 valves.
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