Thanks a lot for all the input. I was expecting at least some flaming from Kawasaki "purists" for wanting to put it in a KTM frame. Glad to find such an open minded crowd here.
Finally got a chance to test ride the Versys this weekend, which sealed the deal. If it fits, I am going ahead with this project. I liked the engine a lot, very smooth, good torque, great power and loves to rev. At the same time the bike was very solid and stable like it was on rails. Can only imagine what a hoot it would be in a lighter and more nimble package which you could take off-road. The gear spacing could be a wider, but is not a deal breaker due to the additional revs available.
I did consider taking a Versys or the naked version of the Ninja available here in Europe and converting it to dual sport use. There are two guys on ADVrider who did just that:
I came to the conclusion that it would be a similar amount of work, much more costly, and the bike I would end up with would not be as good for my use. As Ted said, taking it into real off-road would be tough, which is why I am not thinking about the 800GS or V-Strom either. I already consider the LC4 with its 155kgs at the upper end of what I like weight vise. With some improvements (Hella lights, lighter tank/fairing, titanium muffler, etc) I think I can stay around there even with the twin - does anybody know its approximate weight by the way?
As far as the KTM chassis handling the power, I don't think it will be a problem. A hopped up LC4 puts out about 65 HP, the stroker and rally versions even more. Never heard of any frame failures yet.
It looks like I made a deal on an Adventure today as well, if it works out a friend will go pick it up later.
Next step will be to figure out if the engine will even fit, ideally without having to buy one. Guess I could try to find someone who has one out of the frame to take measurements. With these I could build a dummy out of foam or another material that is easily shaped.
Does anybody see any technical problems as long as I stay with Versys harness, gauges, ECU and injection system?