Two Tired, thanks for getting back,
I have been turning the pilot screws in increments, no change. The carbs have been sync. The intake o-rings and boots are new, I have an inferred temp sensor and they all seem to be even, Ill check again. Spark plugs are all a medium gray, as soon as you accelerate passed the the flat spot, which is about 4K, the engine smooths out and no more flat spot. The plugs are new, timing ok, valves adjusted. To me it feels like one step larger pilot jet or raising the needle on step (lower the clip).
I've owned bikes all my life but I'm not familiar with quirks on the CB500, if any.
One thing I didn't mention is that in the cool 55deg AM the engine has less of a flat spot, if any. When heading home from work, about 85-95deg the flat spot is more noticeable. Which tells me there is a lean condition.
If fixing the exhaust doesn't work I think I will raise the needle and see how that works. I don't like the way the muffler was hacked, but it does sound good.