I have a first gen and everything you are describing is exactly how this engine reacts when it doesn't have enough fuel. I have a lot of engine related mods and experienced what you are describing until I got the fueling right. When was the last time you did valve checks? you might have told...
Disconnect the battery, let it sit for a little and then reconnect it. Then start it, let it idle without touching the throttle for 15 minutes. After 15 minutes shut the bike off.