If you have no leaks in your testing setup- then crank seals are the most likely.
Pop off the flywheel and listen for a leak- then use soapy water.
If no leaks there, then check the clutch side (more work). When I’ve seen the clutch side fail, generally the bike will smoke (burning gearbox oil) and have a much different smell.
of course you want to check for a leaky sparking plug seal, head and base gaskets too.
I’ve had several bikes personally in that vintage that had crank seals quite bad.
Of course, with a twin- you generally have seals on the inside (between cylinders) and those are much, much more difficult to test. I have a manual here someplace, but I think it does have seals there.
I just checked the parts book.
it has a seal of some sort between (looks like an ‘O’ ring). Oddly, they call the seals ‘junk rings’.