Right on, I bought a 97 500 last year and it was a basket-case. Let me give you a little of my experience. That gas would be the problem, especially if it is in the filter. Clean all fuel jets, tank, and line and now filter. Check your spark. If you lean the bike over gas should pour from the over-flow. Also check plug after kicking to see if it is wet. Pull out the reeds, check for cracked or missing petals. My 500 would start easy, but would die easy while missing two petals. Also a buddy of mine had a large mouse nest in his pipe which stumped us for awhile.
The powervalve is the rod in the little plastic cover on the side of the cylinder on the brake pedal side of the bike. They can be hard to cold start, even with a fresh re-build. It may get easier once you blow the cobs out. Is it hard to start when its warmed up?
