Honda-SOHC

Interesting. The US 500K2's were 1973 and didn't have the colors and striping of the later 500K2 [ED, F, G] for Europe in 1976.

Honda had various cables as the models had various handlebars. US had highrise handlebars, Europe not.

That makes me curious. What does that exhaust modification sticker say? Can't remember having seen one.

Tip: always consult the genuine Honda Shop Manual CB500 - CB550 as found in:
http://www.honda4fun.com/materiale-documentazione-tecnica/shop-manual.
Download and forget about Haynes.

The 500/550 will be in the historybooks... next to the pyramids.
Reminds me of that American. Hadn't he done 1.600.000 kms with his Honda Accord? O, here, it is: http://www.autojunk.nl/2011/10/joe-doet-1-000-000-mijl-in-een-honda-accord

Do NOT tighten them according manual torque. Don't ask me how I know. Just use your senses.
Cf. http://forums.sohc4.net/index.php?topic=72806.msg808595#msg808595

You might be interested in the type indicators these bikes were equiped with for the German market.
http://www.d-roggenbuck.de/Meine_Motorrader/CB_500/cb_500.html

I find the correct mark for cylinders 1-4 and set the points gap, all is OK. Then when I rotate the crank for setting the 2-3 cylinders the points for 1-4 are still opening making the gap wider !!

Just to make sure you did it right: you DON'T set the points gap at the mark, you set the gap when it is at it's widest (and that is certainly not at the mark). The mark is for the timing of the ignition, it's the position where the points begin to open. This timing is done after you've set the points gap. So, two different things done at two different crankpositions.
Step 1: turn the crank till gap is at it's widest and check if this gap is within specs. If necessary adjust by moving the set of breaker points.
Step 2: Check the timing of the ignition. That means point should start to open at the mark. Adjustment can be made by moving the backplate.
Check your manual.