Ok so I bought a compression gauge and measured compression:
Cylinder 1: 121 psi
Cylinder 2: 120 psi
Cylinder 3: 119 psi
Cylinder 4: 121 psi
So, compression looks good, at least good enough.
And the good news: I figured out the problem, or at least part of it. I noticed that when the problem occurs only 2 of 4 cylinders are firing (both are on one of the two coils). I suspected the other coil was leaking at the cap, so I put some dielectric stuff in the cap and screwed the ignition wires on tight and voila! all 4 cylinders were firing!!! So, now the bike is drive-able and seems to have restored it's power, but I'm not making much additional power at 7k+ rpm. I assume that this is normal from the previous comments.
I will go for an extended ride and let you guys know if I notice any abnormalities.
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