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That stallion was the only KP one I had at the time that was G8...I thought I was doing the right thing by breeding even generations to try and improve the lines. How can I improve if all it will do is plateau the quality? :( Sorry still consider myself relatively new and learning.

You are doing it right, but, like Ammit mentioned, there is a random element involved. It's like rolling a pair of dice. If you choose two horses who are of similar quality you will get more of a known factor, but there is still a roll of the dice involved. It maybe a little better, or a little worse, or just the same as it's parents.

Small scale breeding, just a handful of horses, means you only get a few rolls of the dice, so getting a superior horse is harder. Larger scale breeding 50-100 horses, increases your chances of getting a nice horse in a shorter period of time, because you get more rolls of the dice. You can do it with small scale breeding, you just need to get lucky, or breed for many, many months.

Maybe you should see if you can borrow a KP stud? Use it for a few months then return it to it's owner. Or see if someone will sell you a stud they have retired.