With the K&N, your mixture is lean. A lean mixture burns quicker and may actually work negatively on the power by combusting before the piston reaches TDC. With the reed switch removed, ur mapping remains at 10 degrees BTDC hence that effect is lesser. With the reed switch, ur mapping get advanced but the lean mixture burns quicker than a proper mixture hence more negative power impact and hence the poor throttle response or conversely better throttle response with reed switch removed. However, it's just a temporary solution. Your engine will still be getting harmed by the lean mixture. I have already suggested the permanent one.

Your top speed problem is because of clutch plates. Stop being so skeptic about your bike. You're exaggerating the problem in your head. Get them changed and then use only mineral oil for your bike. Synthetics are good but you should properly know their usage.

this reed switch's output of your throttle response goes directly to the CDI, so there's nothing wrong with it being there or not, you'll stay on just a particular curve as psr and others already mentioned in detail.

weather your running lean mixture or not, can be understood only after seeing your spark plug's pic.
as you've said you are using a bigger jet as well as running 4 to 5 turns on the richer side, it shouldn't be running lean.

even i feel that you are exaggerating the problem, and expecting tooo much from an air filter, there's no replacement of displacement when it comes to performance.

Ok, i will check up the clutch plates. how much will the assembly cost if i need to replace it.

Its true that am expecting a lot, but not from the K&N (i know that its the just the gain in the acceleration) and not without other performance mods. i had my first thread here when my bike was at stock mentioning the top end problem and had asked for upgrades.
and other friends had given me priror knowledge about the k&N.
This bike was not purchased for my craze and thirst of biking (i was planning to make a good buy one from my personal income), but compromised when the thought of being late on an emergency struck me.
I had tried riding 3 p180's the same model which easily went till 123-125kmph when compared to my bike, those bikes where stock ones.
Am very much attached to my bike and had had it with many SVC's and many local mechanics no one could solve, and i was completely a 0 on technical aspects those days. so was thinking there might be some problems inside the engine that might screw my bike and make me stuck nowhere during a long run.
what i am expecting is stock performances and k&n was not an opted solution for this. it was opted for the improvement in acceleration and was taken as a first step for future mods.

I understand ur point. We all love our bikes, and that's why we're a part of this community. The clutch plate replacement would be in the vicinity of around 2000. And you have taken advice from everybody, tried a lot of things, why are you so pessimistic in taking my advice? You have tried a lot of things, why not another one?

@shubanker:
Sorry... it was not about being pesimistic... itz about the finance am having now, even checking d clutch plates will cost (ya that too will be an issue for me) will need time...

Clutch plates cost Rs.60/- a piece and P180UG3 needs 6 of them.
Pressure plates cost Rs. 38/- each and you need 5
Labour will be anywhere close to 150.
These are exactly the costs I had to incur to replace the clutch plates and pressure plates on my 180UG3 not too long ago.

I meant the advice about the pilot jet.

@pavanchirmade: ok thank you so much for the price quote.. so it should be around INR800.
@shubanker: i was planning to buy one, couldnt get time for that.

you will need to replace the oil and the cover gasket too, which will cost say 300 more bucks...

why don't you do a speed run alongside a friend of yours on a stock p180, it can be a speedo fault too.
i ride with my friend (who rides Fz) and whenever we rip our bikes on the highway alongside each other, his speedo shows 132 and my speedo shows 100, still i run faster than him as i pass him...

just a thought....

@nano: ya i heard that it comes as an assembly and wont be available loose...

Oh! no friends nearby and that to with p180's. I had two of my college mates with p180ug3, had test ridden it and it easily clocked 125-130kmph in comparison, and my bike was far behind... even did a top speed test at the svc. and there it showed the same top speed. this was all done when it was stock

@kb100: no friends nearby nor bikes.. i will try with the test riders bike available with some authorised station but it would be better if i ask for it during the next service.

Get your tappet clearance adjusted at the B.A.S.S.

Finally got some cash...
now planning to do these..
-Engine decarbing (heard 4-stroke exhaust cannot be decarbed, why?)
-Tappet adjustment (how should I ask them to adjust, any figures?)
-checking clutch plates but replacement not this time for d same finance reason
(but planning to add one more pair of clutch and pressure plates, please advice in this regard, will this help me use more power and will it suit my riding style, i often use half clutch to control speed and use full clutch during braking at traffic speeds, without depending on engine braking for time constraint and smoother ride, and sometimes i find myself shifting gears from 3-4-5 at half clutch and 3/4 of clutch til 2nd, wil this new setup do some justice to shifting?)
1 clutch plate + 1 pressure plate ~ INR (150)
- p220f camshaft as "pavanchirmade" did (INR ~500)
- new entire airbox (INR ~500)
- 220 block piston on my 180 ug3 bore (INR ~2500) (would this need a runinng-in, was it silly...running in is for bore right!)
(will it work as had worked going with 200's n will it give more performance, when comparing with another 180 with 200's block piston?)
and what all will i need to alter doing this, shaving the cam? will it be needed since my first step would be the 220F's camshaft...
are the alterations to be done the same for going for 200's block piston and that of 220's.
- no plans to change carburetor, currently running with stock BS29 wid 125mj and stock pilot jet. wil this be enough

And hop it would come within 4000K. please correct me if my figures of cost mentioned above are wrong. how much would be the labour and for decarbing, and how do they do it.

And will all these be wasted without sprocketing...?

As soon as you flag-me-off i would shoot and be in Jai Bajaj in adyar or Khivrak in anna salai.... wotz ur suggestion about service centres think they wont do the block piston job, would try the local mech for this one...

Guru's please advice psr, aargee, pavan, nano, kb100, jd666

^^ Sincere opinion. Not worth doing any mods. Look at restoring/rebuilding the engine to lost glory, rather than pushing for these mods.