I can impart some wisdom.
1. Get a new flywheel cover.
2. The coils are probably shot.
http://www.electrexusa.com is a place where you can buy a new set. The resistance is the key to the coils not what they put out. There is a resistance guide for their coils. Maybe yours are similar. With all the water you talk about it would not be suprising to see them shorted out some.
3. The CDI unit your bike is suppose to have is an analog and not digital curve. Next is compliments of ERIC GORR This means that at idle it is firing at 6 BTDC then advances to 20 BTDC at the rpm of peak torque. At high rpm the time changes back to a retarded position of 6 BTDC. This retarding reduces the heat in the cylinder. This curve is controlled by the CDI. The voltage generated by the stator coils determines where the CDI curve should be. So testing just output is not good. Also the hole in the piston you had is a sign of the CDI advancing the ignition too far. The engine was detonating under acceleration and thus caused the damage. This also accounts for your having to move the stator farther than it should be moved.
4. So now you see that you need to replace your CDI and since there is only one item left in the electrical system, the spark coil, you might replace that as well. I just installed and have ridden with the Electrex HTCDI. A combo black box that houses the CDI and sparking coil. It is easy to hook up and tidy under the tank. The only problem is Electrex USA does not sell this, and their web site in England shows that exact part for replacement on your 84 RM 250. I have already emailed them and asked about carrying this part for all the years of kdx. You should ask for one on your RM.
Once the electrical situation is cured, you can start on the carb issue if there is one.
Ted