As mentioned by Econnor, 1/8" is not normal. Did you follow the instructions for the replacing the choke plunger at the end of the choke cable with the mikuni plunger? Also, you should have a 25 pilot jet with the pilot air screw turned out 2 turns. I would also static time your ignition and set the slope to 5 to start with.
Choke cable instructions.
1. Remove the stock Harley choke
cable assembly.
2. Remove the spring and plunger
from the stock cable.
3. Remove the Mikuni “Starter Nut”
from the HSR.
4. Remove the Mikuni spring and
plunger from the HSR.
5. Install the Mikuni spring and
plunger on the Harley choke cable.
6. Install the Harley choke cable with
the fitted Mikuni spring and plunger
into the HSR carburetor.
DO NOT use the Mikuni Starter
Nut; discard it.
DO NOT use the Harley spring or
plunger; discard them.
Note: If you do not have installation
instructions, you may download them
from the “
www.mikuni.com” website
in the “manuals” section.
If the Mikuni Starter Nut is fitted to
the Harley cable, the choke plunger
is held off its seat and the choke is
open all the time. If the Harley spring
and plunger are used, the plunger
does not seal and the choke is
open all the time. The result, in both
cases, is very poor fuel mileage (30
mpg or less).