RoadHopper,
Thanks for the info, I will check the ignition out today, is there a way to test it and you said theres a kill switch as well?
Spockster's diagram above is a roadmap for exactly that. To test the entire thing, if it were me, be meticulous and stupid. What i mean by that is that usually it's faster to go through every step of an electrical system and make sure each part is in working shape, than it is to try and find "THE" problem. It's a better method for two reasons: Firstly, when something fails, many times it fails simply because it's old. Insulation dries up over the years just like tires wear down. Rubbing, pulling, changes in temperature from hot to cold every night and day will eventually make copper and plastic lose their connectivity between each other, and... to top it off, at different rates. So the odds of a wire failing due to age at one spot in a system of unknown quality are pretty low. Add to all of the above, that working on a system in the first place "disturbs" it since the technician is pulling in places that are normally not pulled, and moving things around to get other things out of the way. So, instead of hunting for "THE" problem, its usually better to presume there is more than one problem. Statistics are in your favor then. Secondly, even if "THE" problem is found, the typical reaction is to jump up and down, yell, "HOORAH!", jump on the bike, and get a six pack at the store. Need to test the bike then anyways, right? right.

The odds of it running the same as usual then are poor because of the reasons above. So then the technician, who had the opportunity earlier to test every single wire is faced with the "square tuit" of needing to pull out the test equipment again and pull the various parts off the bike to perform more hunting, all the while a little frustration has dampered the "Hoorah". If one part of the system has failed due to age, the odds are high that another part of the system will fail for the exact same age reason very soon.
Testing a wire is a three step affair. Test it has continuity with an ohm-meter or a simple LED and a battery. Just prove that one end carries electricity to the other by passing a little through the wire. The wire then has two more ends. Cleaning the contacts on both ends is the job. Disconnect each end, use a little spray and a wire brush while inspecting each end for exposed metal that could touch something else. Make sure that each end has a physical connection tension so that besides being clean, the two sides of the connection can actually touch, touch firm, and remain that way during rattling. In that process, then, remove any oil that seeped into the connector, or any insects, leaves, corrosion from fluid spills, etc. The bike lives in a harsh electrical environment, and uses cheap connections ( relative to consumer TV/computers ) that use little if any solder.
The left side of the system, i explained above for the most part. The right hand of the system introduces the several ways that the bike uses the junction box to defeat the ignition purposely for various reasons.
Starting at the far right we have the neutral-gear detection system. It's a single ( usually green ) wire that comes out of the harness in its own weird spot, is thin because it carries very little current, and it must travel from the top rail of the frame out of the harness all the way to near the bottom of the bike at the gear box. The physical danger to that little wire are huge since it's not routed along anything sturdy so it has very little protection from being knocked around and its connection is in an area prone to gathering road muck over time. The other side of it goes to the JB. The neutral-gear detection system's sole job in life is to turn the bike off if the bike is in gear. In effect, it turns the gear shift into a kill switch.
Next to its left is the bikes way to defeat its own defeat system. Its a two way switch that is controlled by the IC. When the IC senses that the IC itself is functioning, it closes a switch to defeat the defeat system which allows the bike to run while it's out of gear ( or any of the other defeats to be explained below ). This switch also turns off the starter motor. So, given any reasonable engine that is ready to run, the starter motor is turned off automatically when it does run.
Next we have the clutch-cable detector ( Left Hand switch ) and the kick stand detector. Both of these systems can defeat the ignition as well, at least until the IC defeats the JB-defeat system on the whole. Now, you might want to keep those for safety reasons, and i'm the dead last person to advise anyone else about safety, but me? I trimmed those two items from the system on the whole because: a) I'm going to rewire the bike eventually and that's less wires to run b) less wires means less work in assembly c) less wires means a thinner more reliable and lighter weight harness d) fewer wires means fewer connections to keep clean and test during maintenance, and finally e) these two defeats are a pain in the ass.
Going left now in the diagram from that point brings us to the grounding and the battery hookups. The battery supplies the juice to the system and a bike can run with a full powered battery for at least 10 city miles ( i've gotten her to about 25 ). I mean to say, that it can run without any charging system at all, and on the battery alone without the stator or r/r charging it up again.
The diagram points out that the "main" ground on this bike is in several points. There is the battery ground, the chassis ground, the engine crankcase ground, the radiator ground, and also ground wires running to each and every running lamp. From a design engineers perspective, "what a freaking mess". Good thing this is not microwave or we'd need to add praying to the above technician notes.

Every ground wire needs to be tested as described above in the test for wires. The connector on the crankcase may "look okay" but you may as well clean it now while the spray can is in your hand. Fortunately the lamps, though, test themselves for the most part. it lights, or it don't ( when hooking a battery to it ). And so, checking the main ground wires on each end is the thing to do.
That brings us, going left in the diagram, back to the ignition itself which was described above.
Hope this helps, and i stand corrected in advance.
P.S. I did not discuss testing for "shorts" above.