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First off bud, thanks for the reply. Yes, I have done many of the checks you indicated-
I meant to say blk/white wire, not blue/white. Unplug the 2 wire connector at the cdi, have 12V on that plug- 12V supply on blk/white is lost when key switch or kill switch is off. Gray wire on that connector has continuity to ground when not in reverse, opens when in reverse. This is opposite of what the honda service manual says, but I think the manual is wrong. The Clymer manual states it how I am reading, which I believe to be correct. Disconnect the gray wire from the reverse switch and it will not turn over at all. Makes sense, since the 97 will not turn over at all in reverse.
Green/white wire has continuity to ground. Checked at battery, ground connection near coil, and the engine itself.
Yellow/white wire measures 3VAC while turning the engine over. Disconnected the 3 wire plug at the stator with yellow/white, blue/yellow and a green white wires. Checked continuity of all 3 wires to the 4 wire plug at the cdi. All have continuity.
Yellow/white wire has around 1 ohm resistance to all 3 yellow wires. All 3 yellow wires measure about 1 ohm to each other. All 3 yellow wire open to ground on the stator side
Blue/yellow wire measures 320 ohms to ground at the 4 pin cdi connector. Same measurement as the pulse generator that I took out. I get between 300-400mV peak on this wire while cranking engine. About the same at the original pulse generator was putting out
The machine did give me a couple issues in the fall, where it would just randomly die every once in a while and be hard to start up again. I thought that went away, but maybe not.
While troubleshooting this, at one point I whacked the stator cover a couple times with a dead blow hammer. I suddenly got good spark, started and ran the machine for a few minutes, then it died. Checked spark, and it was lost again. Was able to duplicate this a couple times, and this is what lead me to swap out the stator and pulse generator. It didn't fix the issue, and I have not been able to duplicate getting that spark again. Its back to a spark or 2 then nothing, come back in a little while, spark or 2, then nothing.
I'm an electronics guy, and know my way around in that field, and like you my initial thought is something easy and dumb is going on. I'm starting to lose that optimism now though....