Turns out I was completely wrong on my initial assessment.
Upon removing the valve covers the issue is much larger than the welch plugs allowing dust in the engine.
The entire valve train was loose, the nut holding one of the u-shaped pieces that holds the rocker arm was so lose you could spin it around. One rocker arm got lose enough to lose the push rod, it's now bent. There is damage to one head that is not fixable, and the valves still intact showed measurements like .014 and .024 as opposed to .004-.006 as stated in the book.
My book states to adjust valves every 300 hours. This one only had 272. After doing some research I've noted that many people recommend adjusting the valves in these Kawasaki's every 50-100 instead of 300, wish I had known that before but nothing I can do about it now.
After adding up the cost for parts it was decided to purchase a complete new engine, I'll be adjusting valves more often in the future.
As far the spark plug threads, I checked it again and I have no explanation, the 14mm compression tester fitting will not thread and the spark plug that came out of the hole fits a 9/16 X 18 thread checker perfectly. I first though maybe it got hot, but I don't see how, every time this machine is used it's blown off with compressed air and when the outer shields were taken off all the engine fins were clean. Oil was checked with every fill up of gas so it never ran out of oil.
I used to run a lawn mowing business and have had many small engines over the years but never had anything happen like this. My last commercial mower, before this one, was a grasshopper with a three cylinder Kubota gas engine, I put thousands of hours on it and now a family member with acreage uses it, we don't know how many hours are on it now, over twenty years old the hour meter broke years ago and the valve cover has never been off. Regular oil changes and tune up's, that's it. Too bad that engine is no longer an option.
Thanks for the replies.