Jim,
Sounds like a winner. What do you estimate the bike to put down on the dyno? A true Kitaco Ultrahead 108cc Stroker with a VM26 Mikuni puts down close to 12 hp with the right tune. Are you going to port the Kitaco Ultrahead even further, or using a head of your own design, ported and bench flowed?
Also, is the bike still going to be an auto, or will it be a 4 speed manual? If you mentioned this already, my apologies.