Update:
took the other fork apart and guess what, the silly spring was in OPPOSITE of the first.
One had tight coils up top like MRieck and others suggest for progressive rate springs.
One had tight coils at the bottom, like the Honda manual *supposedly* shows.
WTH? In the end, does it matter?
Apparently the PO took it apart, and didn't pay ANY attention to how to put it back together.
Now I am really confused, because the shop manual diagram is for an earlier style fork, not the 77.

This is the last step before I get this nice 77 550 on the road, and I want it to be safe and reliable.
Can't wait to get it on the road!