You say the journals are smooth to the touch. Does your fingernail catch in the grooves?
You've already gotten two opinions on whether or not crankshaft journals can be ground. Here's a third from Airhead guru Oak Okleshen:
Regrinding cranks is OUT--No Go. After factory finishing grinding the
bearing journal surfaces are hard nitrided and is a very thin suface, anywhere
from 0.003 to 0.005 inches. Regrinding will destroy the nitriding and directly
underneath the substrate is relatively soft and won't hold up. So long
bearing surface. If you got a bum crank, overheated, or discolored or scuffed up
or non-uniformity of dimensional specs, don't waste your time on it except
to make a lamp out of it.
In short, you can grind it but it won't last long and you'll be back in the same position soon enough. Used cranks in good condition are not impossible to get ahold of through the usual Airhead parts folk.
What the hell is up with this myth that BMW's easy to work on yeah right Taking this engine apart was a total pain in the ass. You need a "special" tool for just about everything, and nothing came apart willingly.
Is there another comparable bike you can think of that doesn't require special tools to pull apart to the bare crankcase? Not being sarcastic, I'd genuinely like to know. Did you pick up an engine disassembly kit from Cycleworks
? It has pretty much everything you need to tear it apart just a few good grunts -- except the con-rod bolt removal tool, which is available from Napa.