Hi everyone. Thanks a lot for the help. Sorry I haven't kept up on the thread before now, but I've been too busy to work on the bike.
But I did put some work into it the other night and found the problem.
More urgently, if your carb is puking fuel all over the place, chances are your float valve isn't sealing, IMHO. Could be a "dead" float valve point, contamination of the float valve-and-seat interface, punctured float, etc., etc.
This is the EXACT problem. At first, it was a bad bowl gasket. So I replaced the gasket and it just gushed fuel from the overflow. It is definitely a needle/seat issue.
From the minor research I've done on these bikes, I've seen this needle/seat issue come up several times. What is the fix? My float still floats. But it is a very...sorry looking float. It is discolored and looks kinda grimy. BUT still floats! The needle looks fine, and the "seat" is clear.
Now, looking at the seat in this carb (KLR650), it just looks like a free opening. Also, I can't remove the seat from the carb. On other motorcycle carbs I've worked on, the seat is removable and the seat had a screen on the bottom. Is my seat defective?
Another observation I made (and I'm a bit concerned about) is that the needle has a spring to it. The little pin on the needle, where the float tab pushed on it, has a spring. So, the little pin can move back and forth in the needle. The pin only moves when the needle is all the way up. Is this supposed to happen?
Trying to think about the issue at hand, it would seem that the issue is BECAUSE the needle is not being pushed far enough upwards (to block the flow of fuel), but this little springy pin works against the float.
One last thing, I promise: the thin metal "chassis" on the needle that hangs on the float tab has a bit of play in it. There is space between the float tab and the needle hanger. I guess this would cause lag in fuel supply?
What do you guys thing the solution is? Would it be as simple as bending the little float tab up a bit?