Actually, the oil sneaks through the rings. Keep the oil level in the bottom half of the sight glass, and lean the bike to the right for 10 sec or so after you shut it off. That helps, I alway make sure I have a clear getaway before I start the bike so I don't have to deal with folks who don't appreciate my mosquito fogger.
I would suspect that at that level of oil when the bike is level, that when it is on the side stand, the oil does not go past the bottom edge of the cylinder and down past the rings...
Duck, when I filled the oil to the top of the sight glass the thing smoked lots almost every startup. I'd guess what brad man said or less oil getting splashed around by the crank. Whatever, mine does much better with the oil lower.
Do you even know where the cylinders are on a K engine? Do you understand gravity?