BerndV thanks for your response. I poked around but couldn't find the canister; where is it located? Do all K 1600's have one, or just bikes spec'd for CA & other states with stricter emissions laws? What I did find was 2 vent tubes terminating under the bike behind the sump, ahead of the center stand. I shot compressed air up them, with the fuel cap open. I heard the air go into the tank, near the top, from one hose. The air sent thru the second hose also ended up in the tank, but it sounded like it went thru somewhere else first- I could smell gasoline afterwards.
Reading up on this, is sounds like an issue that others have dealt with. My fuel gauge is messed up too; it sounds like the problems are related. I stopped in at the new Milwaukee dealership & they gave me an appointment 2 months from now to check it out! Bike was purchased 13 months ago from a now out of business dealer, but this should be under warranty.