No budget limit?...
Buy a Ducati and stick a Boulevard badge on it... ...

Seriously,.. you might have the wrong bike..
You can get under 350lbs easy,.. but, if you want more than 40hp and still reliable, this bike ain't it..
I wouldn't sink that much money in a bike just to gain 8 or 10hp...
You can get 3 or 4hp gain for $30... past that, and you're trying to make a silk purse out of a sow's ear...

Just an observation from an old guy who learned on Kawasaki H1s and H2s. There is a lot to be said for handling and usable horsepower in the range you use. The stock bike in 3rd or 4th gear can handle a wide range of tight curves and stay in the power band. I moved my bike from the lower band to the middle upper middle with a quiet Harley muffler and slight carb adjustment. Having said that, go for it. But ride it a couple of thousand miles first so you can tell if you're going forward not backward with your mods.

No budget limit?  

I would leave the belt and pulleys.  Drill the front pulley and it'll be lighter than chain.

Drill pulley cover

Titanium bolts everywhere.

Mikuni flat side pumper carb.

Professional flow bench port job.

Electrical... minimal wiring job, eliminate the safety's, bye bye starter relay (push button on starter)  bye bye decomp control/solenoid (lever op) mini sig's and tail light, minimal controls.

Aluminum fenders, shifter, pegs, battery box/cdi/rectifier mount.

the ryca battery box is slick, but way too much for the micro battery.

do I hear 250 lbs?

Hey, BTW.... what the heck is your objective?

I also see progressive 440's or Orlin's in your future and either swap the front end with a sport bike or cartridge emulators and stiffer springs.

NicholasTanguma wrote on 01/20/12 at 21:03:48:

You'll have to tie the battery down in there.  It will be like tossing a weiner down a hallway.  

1) Pack money in box. 2) Secure box of money to bike. 3) Ride to Slick Chick's. 4) Tell em you want the absolute top of line treatment on bike. 5) Give em 90 days. 6) Refill money box as needed. 7) Have fun!

Sometimes we do things because we want to, not because it makes economic sense. If everything had to be practical and make sense, most of the things you read about here would never get done.

I suggest that you put the bike on a diet and see how it performs before you do any engine mods. You said you liked to looks of the stock bike and want to maintain the S40 aesthetic. But if you’re serious about removing weight from the bike and cost being no object, here are some weight reduction thoughts…

Carbon fiber wheels. They will need to be modified before they’ll fit, but, cost is no object. You’ll save a couple pounds per wheel.

With the carbon fiber wheels you will be able to switch to tubeless tires. More weight savings per wheel.

Carbon fiber or fiberglass fenders, front and rear.

Fiberglass or plastic fuel tank.

Small LED turn signals front and rear.

Electronic instrument to replace the speedometer. The Veypor unit also includes a tach in one package.

Replace the stock muffler with a megaphone or shorty muffler. The one in the Slick Chics You Tube looked light and really cool.

Replace the stock battery with a lithium ion battery.

Verslagen 1’s suggestions for weight reduction are all good ones.

I would guestimate the above mods will pull a good 25 pounds off the overall weight.

Don’t forget there are big bore pistons available that will allow the displacement to be taken to almost 700cc.

This is an interesting project.  Be sure to post your mods and the results.

Here's an additional weight reduction technique...Those wheels are just $3499.00 each. That'll make your wallet quite a bit lighter so you're saving even more weight.

These can be purchased in Dayton Ohio, just a few miles North of me. Be glad to pick up a set  for you  

Hey, this doesn't have to make sense, it's just fun to think about!