Well, it wasn't the valve cover spewing ... loss of compression, oil seals, and other undiagnosed engine problems. I took ZX99 to Smooth Scooters in West Medford, MA, and Frank and I agreed that for about the cost of a rebuild, I could just get a new GY6 engine. I liked the idea. It took Frank a couple of weeks to get it delivered (he has a source that he feels positive about) , and installed it for $150 in labor. The cost of the engine is comparable to prices I've seen on eBay and other parts suppliers ($400).
I can highly recommend
Frank http://www.smoothscooters.com/ ... his shop is first rate.
Rode it home it it felt and sounded like a new bike. I'm not sure where I went wrong with the original engine ... hopefully this one will last much longer.

Some photos of the new engine:

Significant difference ... a 2011 mfg date, rather than the original 2008. Plus, it's a 1P57QMJ, not a 157QMJ

Goodbye Redstreak label ... note the ventilation intake is on the botton of the CVT cover, not the scoop with the filter on the front. Different CVT cover bolt configuration too ...

More detail on the ventilation intake
7/20/2011 Update:
I forgot to mention that when I went to pick up ZX99, the headlights lights were dim when the engine started. Reminded me of the time on the first engine that I needed a new stator, and the replacement was not putting out sufficient power.
I mentioned this to Frank... and he swapped the stator in my old engine with the new one in the new engine. Power was restored.
So, you need to be careful with these 6 pole GY6 150cc stators --- they are not all spec-ed the same (and there is no way to really tell what the specs are when you order a new one).