Nice start, a couple of thoughts for you:
1) The mono setup really does look more fighterish. By using an appropriate donor shock/spring, you should be able to get something that works better. I suggest a Ducati 900/750SS unit, since it also has a linkless monoshock setup and the geometry could/should be closer to what you've got here.
2) The GS500 forks let you mount up that nice 17" wheel with the big brakes, but they have horrible damping. A set of RaceTech cartridge emulators will make a world of difference to those forks. This should be considered a mandatory upgrade, it's only a few hundred bucks and will transform the bike.
3) With better suspension and grippy rubber, you may find that frame flex becomes a significant issue. You are going to want to brace/gusset that frame.
Looking forward to watching this build!