Welcome to MUD!!!
Sounds like beaut! Pics?
Does it have all the original emissions equipment?
I live in area that does have to test for emissions. My buddy has been looking for a Cruiser for months (
he just found one yesterday!), and he passed on ones that didn't have emissions components. I know you are not thinking of selling now, but I think if you de-smog, you have effectively removed people in air quality areas as potential customers. You have lowered the value of your Cruiser.
I have 1978 that I do have to test to license. I could test it and get collector plates and never test it again, but I really don't see why people get so tweaked about testing. I keep mine tuned and it passes just fine.
If I were you, I would get the emisions manual and tune it. The only deviation from the manual I would make is running ignition more advanced than the 7 degrees before TDC.
It may be running poorly because vac hoses are not hooked up, or hooked up improperly, or are leaking. If the system is hooked up as it should be, and it is tuned, I am guessing it will run better...
You can also send the carb and dizzy out for a rebuild. Jim C. or Mark will do you right, set your timing curve, build carb for your altitude specs... They can also advice as to what mods you can make that are reversible...
I don't really know what you want to do with this '78, but unmolested Cruisers are getting more rare. If you may sell it in the future, I'd keep the mods mild...
Good Luck!