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Yes, run a bigger main jet when running pre mix.
Check valve clearance, 0.04 " inlet and 0.05" exhaust. if you don't have a feeler gauge just make sure you have a tiny gap. you can check the...
Main jet is too big, run it up to top speed and do a plug check, it want's to be a dark chocolate brown, not black.
You won't need the highest spec crank.
Not easy without impact gun. Just do one thing at a time, fit 70cc kit to see how it runs, jet carb so it runs good, fitting all these parts all...
The rear splash cover is basically a sheet rubber that just hangs down between wheel and cylinder.
Is it carb or efi model ? There is a couple of mods to derestrict them (carb), variator.
Yes it looks like the splash cover is missing so water off rear wheel is going onto spark plug, get some wd40 and spray all over electrical...
Main jet could be too big, run it up and check plug colour, it wants to be a nice dark chocolate brown.
Engine to frame earth cable ?
if it's on the left it should have a bendix gear. I havn't worked on a Diablo for a couple of years. put a picture up of the engine.
Does the starter motor sit on top of engine underneath carb on r/h side ?
Unfortunately your a bit late to the party, lots of old members have moved on due to scooter ownership dropping, young people not wanting scooters...
Try the original carb on it.