What color where the plugs? I have a hard time seeing how the plugs were ok if your buddy cut off the end and it ran batter. If that was the case, then the plugs would NOT look fine. Most likely your buddy is wrong about what is fine and is not fine on plugs. Starting in 77, honda leaned out the bikes and in most cases, the plugs should be a VERY light tan, more like a dusting.
Also, did you test the ohms on the caps themselves? most resistor caps should be about 5k ohm.
remember, your buddy might have gone through bike school but ask him what ages of bikes he worked on. most never go older than the 90s and if that is the case, he is only flying somewhat less blind than you are.
Also, the rust in the tank should be a big clue. You MUST drain that gas out and then either clean the fuel filter or replace it. Those flakes are likely plugging the filter.
The ride IS the adventure. The destination is just to get gas!