Hello everyone. I'm new here. I live in Melbourne, Australia.
I have a '95 GS that I bought second-hand in '99 with 20,000km (12,000miles) on it. It's been very reliable and very economical.
Riding it to work every day has now put 113,000km (71,000miles) on it and it's starting to use rather a lot of oil. It's always been serviced professionally and on schedule. Apart from the oil usage, it seems to be in very good condition. I suppose I could just sell it, but the only bike I'd like to replace it with would be another GS500.
The mechanic I take it to has suggested that a hone and a new set of rings would give it another couple of years. Does this sound reasonable, or is it likely that valve guides and seats and big end bearings would also need doing at this stage? He suggested a figure of around $700 for the work, which I suppose is reasonable given that it's only twice what I just paid for a service, tune and new rear tyre.

I put 80k miles on a 97 GS500.  How much oil are you using, how often do you change it, and what grade oil are you using?  The GS engine will start burning oil as the milage builds up on the engine and will burn increasingly more as the milage builds up on the oil.

A worn GS engine also pushes out a lot more oil at higher rpm's.  My 97 GS was totalled and replaced it with a 02 GS that runs much better, more flexible with the newer carbs and cams and although I fixed up the wrecked 97 to keep as a winter bike, I finally parked it because the 02 was just more pleasant to ride.

On the 97, I had changed to the heavy duty oil like Delvac or Rotella in the 15W-40 grade, changed it every 2000-2500 miles, kept the revs down below 9k rpm and was only using a couple pints between changes.  Wasn't considering overhauling the engine, would probably still be riding it as is except for the accident.  A stock GS doesn't do much anyway above 9k revs, power reaks at about 8500 rpm and pushing a worn GS engine to redline really pushes out the oil.

Did he test to see what is wrong or is he just guessing that it's the rings? 

Try this:
Get a compression gauge.
Go for a ride to get it hot.
Test the compression on one cylinder.
Put a small amount of oil (about 5 ml) in the cylinder.
Retest the compression.
Repeat in the other cylinder.
If the compression improves, then yes, a hone and new rings (or a rebore) will help because yours are worn.
If it doesn't improve or improves minimally, then it also needs the head reworked.

How much oil are you using: around half a litre per 1,000km, or nearly a pint in 600 miles.
how often do you change it: Every 6,000km (4,000 miles) since I've owned it.
what grade oil are you using?: Not sure what the mechanic uses, probably something like 20W-50 (it's pretty warm here) which is what I top it up with.
I don't often exceed 7,000rpm on it.

I don't think the mechanic has checked the compression, so he's just guessing the rings are worn. I'll see if I can do a compression test myself in the next week or so.

I did the same thing, used 20W-50 oil in the summers in all my bikes for many years.  Wore out four early to mid 80's Hondas before the GS500's.  I bought the 97 GS new and changed to 15W-50 Mobil 1 synthetic at 5k miles and didn't add oil between 3k changes till past 50k on the clock.  It went the same way as the Hondas requiring increasingly higher grades of gasoline as the carbon built up to prevent gasoline knock under heavy throttle in hot summer weather.  After about 60k miles I changed to the 15W-40 Delvac and found out the bike ran cooler on the 15-40 than it did on the 15-50 even though it was dino rather than syn oil.  Oil provides engine cooling in addition to lubrication and the lighter oil ran cooler, better oil flow.  I went back to regular grade gas with the 15-40 and have used the 15-40 in the 02 since I got it and remain on regular grade gas with over 40k miles on it now.

In my humble opinion, 4000 miles between changes is way too long for an oil cooled mc that shares the engine oil with the tranny.  Viscosity breakdown due to gear shearing action occurs mostly in the first 1500 miles and levels off after that.  A 2000 mile interval is much better for the GS.  I run the filter 4k miles and add a change of oil between.  I do go further more often than I should and oil consumption just increases more and more as the miles on the oil build up past 2000 miles.  No problem running modern oils 4-5k miles in modern water cooled autos with seperate tranny oil.

Keep in mind that the larger the oil grade range is the more it will break down towards the lower number as the oils miles build up.  Those long stringy molecule thingys get chopped up in the tranny and a 10W-40 gets closer and closer to a 20 viscosity than a 40 viscosity hot as the oil breaks down. 

I check compression the old fasion way with each spark plug change.  If you pull the plugs and hold a finger tightly over the spark plug hole and it's blown away with a loud pop when you crank it, the compression is good enough to run good.   

Mine was using a quart in 300 miles - about a liter every 500 KM. I'll ride the damn thing till you get there. Which you may never ...
Cool.
Srinath.

The oil consumption that you stated (1 pint in 600 miles) isn't so great as to worry about it. With cars, generally when it uses more than a quart every 1000 miles then that would be considered excessive. I think that in the warm temps and with the high miles, that 20w50 is probally the best choice, but you may want to change it more often. Every 3000 would probally be better. For $700 for a ring job, I think you're better off just running what you have into the ground and keep your eyes open for a good used engine in the meantime, so you can just swap engines when the time comes. Right on with racking up the miles