Tim, Thanks for the info. I decided to order a new engine, and use the old one for education and eventually another build so I'll try your suggestions.
I ordered another skyhawk from piston bikes. Finally had some time to work on it, and fired it up for its first ride today. Its cold here, so it took about ten tries, but once it started firing I was back in business. I'm breaking in this time with opti 2 at 100:1. I don't know if its the opti, or the 2010 skyhawks, but so far it seems much much smoother and well behaved than the 2009. Less erratic.
Here's a vid, it never sounds as good on youtube but I feel like its running pretty nicely: YouTube - Back In Business
The clutch however seems a bit suspect. I had to tighten the clutch, and I noticed that the pucks are really jammed in there. I couldn't even pull them out. So I probably am only getting 50% action on the clutch right now. I'll probably end up pulling them out to sand them down unless there's a better method.
Wheels are out of round pretty badly thanks to the hard riding perps, but I'm thinking of switching to nice sun alloy 26 x 1 3/8 rims EA1 style from the S6 that are currently on there. It is impossible to find good tires for the s6 rims. But the european style has some really nice options like this cream colored tire. Schwalbe 37-590 26 x 1 3/8 Delta Cruiser Cream w/Reflective Stripe - harriscyclery.net
Sportscarpat's tank is on there and looking good. It really improves the riding experience over that peanut tank getting in the way. I think the collegiate makes a good basis for a motorized city bike build. The frame is pretty bombproof at 45 lbs. The engine fits perfectly, the geometry and seating is good for visibility around cars. The biggest problems have been drive chain clearance, I had to spread the rear chainstays, and the S6 wheels being a pain. When I replace the rear tire, for the third time (cheap tires) I'll bevel the edges of the stock drive gear. Maybe I'll try to spring load the tensioner some how. The clearance issues keep me from going tensionerless, or using a solution like Kip's tensioner.
I'm also trying to decide whether I should switch up the hub so as to have a better drive gear mount, either the ce sprocket adapter or maybe the grubee hd hub. Maybe there's a belt drive solution that makes sense.
These are all of course fun problems to have.
I've got a sick bike parts expansion on standby for after break in. I'm back in business and super excited. Now I've got a big heavy duty kryptonite lock, I'm not taking any more chances.
Cheers to everyone.