A lot has happened and now the bike is running, but still has sync loss issues. I have done some changes: big 114mm diameter 36-1 trigger wheel with cherry long red hall sensor, and vw smart coils.
There was a faulty 5v regulator on my speeduino when i returned to this project, i replaced it and it started "working".
I was riding yesterday with steady throttle, like 40kmh speed with almost no load to the engine, when suddenly bike started accerelating slighly, and made some knocking sounds. I am not 100% sure but that seems like ignition advance is going all over the place. It only lasted couple of seconds and it happens sometimes only.
I have been thinking that maybe my hall sensor is bad or not suited for the job? or maybe arduino is bad.
I have tried to eliminate interference issues by using foil tape to cover some wires, i have star point grounding, installing smart coils eliminating plug wires all together. I have even put some capacitors to alternator leads to "smooth the current" and even disconnected the alternator. I have hall sensor wires going inside grounded copper jacket. Nothing of these things haven't made any difference. So i am thinking it might not be interference issue.
Do you have any ideas?