Check your math, JP; 15/50=0.30=30%. You might be aware of this, but for those who haven't done performance work on the XS650 mill it might be worth pointing out that you won't get to the 65-70 hp range on the old twins without boosting compression to the point that race fuel is required, and you won't have a motor that will behave very well on the street. For the track? The frame, fork, and swingarm will need to be braced six ways from Sunday, and you'll need to add an oil cooler regardless, so your weight estimate is going to need some revision. And where are you going to race it? No matter what you do you won't compete with modern iron, and you won't be legal for AHRMA.
Agreed, Roy, that bike is very cute, and if a guy has time on his hands, an SR donor that's past rescue, realistic expectations, and the skill to do frame and suspension mods safely, well, have at it. And right, Tom, cutting up a viable SR would be plain vandalism; you could sell the SR and buy a Trackmaster, Shell, or other race frame.