Thank you,

10 months into trying to identify the problem and gradually going through and checking every suggestion I came across, we strike gold.
I have found that the tiny ball bearing inside the valve in the petrol cap, had rusted. Thus shutting off the air and creating vacuum in the tank. This problem would arise only once riding for a while. I believe this was a feature designed to comply with Californian regulations, to prevent 'copious amounts' of fuel leaking out through the pinhole size venting valve, in the petrol cap. if the bike were to be dropped, the ball bearing would shut off the fuel leak.
The owners manual does not seem to mention this 'safety feature' but with the help of the good people I finally found the problem.

Thank you to the great folk on kiwibiker.co.nz here in New Zealand and virago.com fellas in the states and world wide for all the advice. thanks heaps to the kiwi motorbike guru Jim Dougherty who lent time, parts and advice, and of course my good friend Sergei Bolotnyani who spent countless hours going through the bike with me. Could not have done it without your help. Thank you!