The sleeves can be replaced. They're a wet sleeve with a slight pressed fit. If the cylinder block was placed in an oven at 350 deg.F. and heat soaked for a few hours , then removed, you should be able to knock them out with a tap of a soft faced hammer. once the sleeves are out, clean the oring grooves and ensure there's no burrs on the block, install the new orings, place the cylinder back in the oven and heat to 350 Deg F. and then once heat soaked, , take the cylinder out of the oven and set it up on a set of blocks so that the sleeves are free to drop in, then insert the sleeves and ensure they bottom out the top flange to the block. Send the block in to a machine shop and have them lick off the top of the block to ensure a single solid surface. Done.
Now someone is going to ask "Why put the orings in the block before heating? "First, you don't have a lot of time to drop in 6 sleeves before the block is too cool to be able to drop in the sleeves. Second, the orings are silicone based and can take up to 500 deg.F before failing.
Could this job be done on an arbor press? Possibly, but you take the chance of cracking the block. Also remember that the sleeve has probably been in the block for the past 30 odd years and some aluminum oxide will have built up near the oring seals and cause some grief getting the sleeves out.
I have heard that if a cylinder block was left sitting on the bench right side up, that sleeves would push themselves out of the block. I suspect that was a poor fitment. Normally wet sleeves are in with an interferrence fit of around .001" - .0015" per inch of bore diameter. so for the KZ1300 cylinders I would expect about .003" - .004" interferrence fit. When the cylinder block get put in the oven the aluminum expands more than the cast iron sleeve (coeffecient of linear expansion) and that's why the machine shop practice is to heat up the block. Many have tried to drive the sleeves out of a cold cylinder block with a wooden block and a mallet and resulted in breaking off the thin bottom end of the sleeve.