Hard to say what the exact problems are, or what caused them, until the tear-down.
It isn't unusual for an old model with practically zero miles to have some rust on the bearings. That could be the problem right there.
The 2000 models had neoprene quill seals, so that's probably not the issue.
But when the bike sits that long without use, things can get rusty, even inside the engine.
As previously recommended, use top quality bearings for replacement. Upgrade everything you can while the engine is torn down.