Cut the yellow/black wire near the starter control unit and grounded it like several people have recommended.
Magic - problem solved! Engine turns over fine.
I also found the Radio Shack 275-206 relay mentioned as a replacement for the starter control unit - had a hard time finding one as not available through Radio Shack online but one showed up on ebay. It seems there must be a more modern relay that would work but i can't read electrical diagrams. Someone who can might be able to recommend another easily found relay from the diagram on this forum post:
http://ascot500.com/index.php?PHPSESSID=5kbr0l1b610ifqi8p3r8lovj82&topic=576.msg3271#msg3271 (link in last post). We'll see how that goes.
Anyway, engine turns over and have spark. Next step getting carb and tank back on and see if she runs!
Thanks to all who have weighed in on the starter control unit problems - what would we do without the forum!