Don't think Naruto would be defeated. But don't think Naruto could land a shot either.

Too berserker, plus Sasuke with his sharingan can see the moves, but most likely unable to dodge Naruto at first. But since now he's level 2, probably he's faster.

Don't think Kakashi can stop them.. Well, at least I think Kakashi can stop Naruto. Sasuke's too far gone. Probably Kakashi would probably pull a fast one and break up the fight.. maybe knocking Naruto away or something.

But anyhow, yeah.. I don't like DBZ shit. However, I think/hope it's going to only be a one 'off', since it's only Sasuke and Naruto that can power up. Not that all fights from now on, Naruto's going to pull out his Kyuubi and do the same thing. Or all fights from now on is going to be a Powering-up battle.

But if Kakashi suddenly channels his inner hidden chakra, and change hair colour, and powers up to level 2.. I'm going to throw my chair.