Okay, so bit of an update. I sat on the bike yesterday, may have even been for the first time. No idea what I was worried about.
Backstory: Bought the bike two years ago and immediately put it in storage. Been pretty sick till recently so never got around to going through the bike. Girlfriend sat on the bike when I picked it up and told me it felt huge and that she hated it (this is the one that steals my first gen 900RR and loves that bike). She's exactly my height. So, it seems my assumptions about how tall/large the 550 is are unfounded and were just based on my girlfriends "feelings". No idea why I decided to take her words that day as possibly being objective... Don't think I ever even sat on the bike.
I measured the rear shocks at about 12.125" compressed under the bike's natural load (so seems stock length) and the front forks were in the factory position in the triple clamps. It has basically brand new (though now 20 year old plastic) Kenda Challengers in 100-90-19 up front and 120-90-18 in the rear. Seat is definately shaved (poorly) maybe half an inch to an inch in the rider seating area. Also, the bike has some odd low height handlebar that is 29.5" accross. Too wide, initially mistook it for the CB400F handlebar, happy it isn't as that's what I want to install. With the bike in it's current state and me in my running shoes I see no real reason to lower the bike (and I'm taller in my riding boots). I may do 1" max at the triple trees and via custom shorter shocks if necessary, no more than that.
Unfortunately the bike is more of a basket case than I thought though. Price was right and there was no visible concerning rust or damage to the frame, swingarm, or motor so I just paid the guy immediatley and loaded it up. Upon closer inspection yesterday I'm a bit concerned. The bike was originally owned by an older gentleman who was slowly modding it and doing some low speed lapping at his local track. It seems someone who didn't know what they were doing had the bike in between the older gentleman and me and started going to town tinkering with the bike. I can tell bolts are in incorrect positions and things are done just plain wrong and missing here and there. Lots of evidence of real amateur assembly/wrenching/tinkering on the bike. Whoever worked on the bike between the older gentleman and I didn't have a clue. Going to take a bit of effort to go through the whole bike and make it safe/reliable.
Not doing any of that till I do a compression test and make sure I have a decent motor to work with. Because if I don't have a good motor I'm not sure where I'd source one for the bike. On a positive note she does have oil in her and does turn over! Build thread to come if the motor checks out, will need lots of help trying to figure out this bike, mostly all the hardware and unhacking. I can tell everything is in the wrong place and/or crappy Home Hardware bolts/nuts were used whenever possible. I have a feeling the bike sat in pieces for a bit and the person who did the reassembly wasn't the one who took it apart.
While I was with the bike for fun I took off the tail light and turn signals. Holy crap I didn't think it would be this easy to get weight off this bike. I thought my goal of 425 lbs wet would be difficult to attain but I'm not concerned at all after feeling how heavy components on these bikes are. Still have to change the gauges, change the handlebar, get rid of the center stand, lighter exhaust, lighter battery, etc. Crossing my fingers on that motor checking out. If it does I'll bring the bike home so I can start chipping away at it.
Pictures for your viewing pleasure: