Timing advance issues?

Pics of the plugs? Also if the petcock is leaking, gas could be sucked into one cylinder causing flooding and poor performance.
Steve

The plugs were whitish indicating a lean mixture.

TexasKZ wrote: If the petcock is marked On, Res, Prime, and fuel flows in any of those positions with the engine off, then it is a vacuum petcock that has failed. Fuel coming out of a carb overflow when the engine is off is a sign that the needle valve in that carb is also in trouble . The combination can cause intermittent flooding in that carb.

If the petcock is marked On, Res, and Prime, then you have a vacuum petcock. With the engine off, fuel will not flow with the petcock set to On or Res. If the engine is off, fuel will flow with the petcock set to prime. The point of the Prime position is to fill empty float bowls if they have been drained intentionally or by evaporation.

Does your bike have a sidestand switch? That can cause the ignition to act erratic while in gear if the stand is up. I wouldn't expect a 78 Kz650 to have a sidestand switch, though. So maybe it's something to do with the neutral switch, but that is unlikely. Or it's something to do with the clutch lever switch. Maybe it's been wired wrong, and affects the ignition instead of the starter.

vondikka wrote: Still not sure why it'd rev normally in neutral but not while in gear.

My 3hp lawn mower revs normally when I throttle up.... with no blade on it, the motor revs up like a mother F !!!
Your engine requires very little power to rev up in neutral, with no load, either.
I don't think that is any real meaningful indication of what's happening.
It still sounds like a fuel issue or the advance mechanism is not advancing... etc

Since you know the petcock is faulty I would start by fixing or replacing it. It may turn out that the petcock is not related to the problem, but since it needs to be fixed anyway I would start there if nothing else just to eliminate that possibility. Ed

No side stand switch. And yeah, I'm def gonna rebuild the petcock.

And the timing is advancing so that's not the issue