Tamara,
Tell your buddy, I feel your pain my man.
I went through that just last June. I was not looking forward to a complete engine teardown and like you I would have rather had a root canal that do that work. I had just done a top end refresh the year before and with the exception of the secondary drive seal problem the Zook was tip top mechanically. I ride my GS, allot, over the last three years I've ridden it 25k or so, and that was while I was pretty much doing a rolling restoration.
I documented my work here,
http://www.thegsresources.com/_forum/showthread.php?t=209765
I admit once I got down to it I really enjoyed the experience. Although these old GS's are amazing motorcycles I don't think the designers had any idea there would be such a cult following after thirty plus years and this many bikes still on the road. With a good amount of TLC they will virtually last forever. To do that you will eventually need to replace "all" of the rubber parts in the engine, seals, o-rings, gaskets and such. After so many heat cycles they eventually just break down.
I couldn't be happier with the results, the bike runs like new, I figure it will last longer than I will now. I just did another round trip to see family in San Diego two weeks ago, 900 mi in three days, traveled through undoubtedly the worst weather I have ever ridden a bike through, thunderstorms, lightning, rock slides, flash floods, rained so hard I could see maybe 30 feet in front of me at times. I took this once I got on the other side of it.
The Zook never missed a beat and ran perfectly.
Once your sure of the problem my recommendation would be to tell your Buddy to bite the bullet and do the work, what you end up with is a truly classic ride that you can ride anywhere with confidence.
Cheers