Help needed with my IT400

OK. I bought a 77 Yamaha IT400 that a guy had "tried" to turn into a cafe/street tracker bike for $200. He said it would start on starting fluid. After a major makeover and a carb cleaning along with a float adjustment, it is running and I have been riding it back and forth to work for about a week. The problem is that it feels like I'm riding on a yz80(it's slow). I am no mechanical genius and I'm not real great with carbs, but I know my way around a tool box and have been riding motorcycles for 15+ yrs. I just need some help with this one.

It feels like it doesn't rev up all the way. It doesnt have a tach so I dont know what its actually turning. Also, I dont know if it has a powerband like a more modern 2 stroke, but if it does, I cant tell because its not hitting it. It revs up to my best guess of around 4000 rpms, then starts cutting out like it has a rev limiter. But it doesnt. All the drivetrain/gearing is factory. The only things changed from stock is the pipe was cut up/modified to run under the motor and it has an after market cone type filter.

It is very disappointing to ride when you know its a 400cc two stroke and it performs like a moped. Everything I have read says the IT400s are fast as hell but this one is not. I have read other threads and it seems like it could be 10 different things.

SOMEONE PLEASE POINT ME IN THE RIGHT DIRECTION!!!!!!!

Oh, and compression is 140

Did some tuning/testing today. 1st I repacked the muffler because the packing was soaked and moist. I did a spark plug check and it was black and wet so I set the needle to the leanest (top) setting and adjusted the air mixture scew to the highest idle (3.5 turns out) and it revex a little higher. The air filter is a cheapo cone filter off eBay I think. I took it off and the bike was a whole different machine. Not quite right though. By taking the air filter off I leaned the mixture. Right? So I'm thinking time for a smaller main jet. It has a 350 right now. With the filter on it won't rev up no matter what the mixture screw is set at.

The cure:

32:1 premix, K&N open air filter, 320 main jet, 40 primary jet, needle clip in slot 3 (middle slot), air/fuel mixture screw 2 1/2 turns out.

Spark plug reads nice and light brown color. Runs like a champ. It's a beast.

Sorry but all that is a little above my head. Not that experienced of a mechanic.