Mine was exactly the same. It seems there are some morons out there who buy a bike, run it, (or worse still, take money to service it!), and don't have a clue as to what a dry sump engine is. I got nearly 5 litres out of mine.
Drain it at the sump plug, remove the oil filter, remove the swarf filter at the bottom of the frame, and fill it back up with 3 litres of good quality motorbike oil. Run it around the block, 3 or 4 miles at least, then stand it upright for a couple of minutes, and then check the dipstick. Never check it cold, as the oil drains slowly into the sump. Some people say to check the oil level with a hot, running engine. Mine spits it out if I try that (the scavange pump squirts oil back into the oil tank, at the top. Of course as you discovered, the oil tank is your frame).
Cracking bike tho', aren't they?
Baghira 660 for the road, CCM 404 for green laning. Singles rock!