Yangon airport had an ATM right outside of customs where we used a US debit card (pre-notified our bank that we were going to Myanmar) to withdraw 300,000 kyat ($306 us). It gave us about a half-inch worth of 5,000 kyat bills. There was no line. I would expect that the atms run out of kyat thouh, since only a few hundred withdrawals would dispense a stack tsller thsn the machine!
We also changed us$ for kyat at one of several money changers, all ofering a rate less than .5 % off of the bank rate (980 or 981 per $, bank rate 985.5 - great exchange rate!). I used new latest edition us$100 bills, which had two lengthwise creases (folded to fit in a belt ) and had folded edges but were otherwise new. They only examined them a bit and worked the edge creases before taking them no problem.
I have seen a bunch of money changers throughout yangon but havent yet used them, though their rates were nearly as good- 978-979 per us$. Worse rate on smaller bills - common occurance. I expect they will be more scrupulous about the quality of the bills. I gave a crappy $10 to a duty-free person on the way out of the airport (decent cheap wine - the booze is abt the same price as we've seen in stores in Yangon but we dont see much decent wine) who rejected it because it had a small tear, and then i gave her a mediocre $20 which she accepted, giving me as change the most crisp $1's I've ever seen.
I think the era of crap exchange rates and sketchy back-alley deals for better ones is over for now, at least in yangon. I'm less clear about the relative scrutiny of bill quality. But keep bringing crisp bills for now.