Ring Gap?

If I was going to just tool around on this engine, I'd not worry over it. KB top ring gap specs are just like what you are finding and no one is complaining about them.

My son's 340 has the same sized ring gaps as you are finding on KB's, and it seals up just fine. And, I just put together a 4 banger with the bores enlarged for the use of some forged pistons and got the same range of ring gaps as you are finding. After 50 miles, the cranking compressions were 164 to 169 psi. So the rings are doing quite well and that gap is obviously not any issue at this point in time.