Hope I don't confuse us all, including myself.
With the stand up, the CDI finds a ground through the sidestand switch and the engine runs. Lower it and the switch opens, forcing the CDI to find a ground through the neutral switch. If the bike is not in neutral, the engine quits. So the problem is either with the neutral switch or the sidestand switch or related connectors/wiring.
I'm assuming the bike doesn't start in the morning because you are in neutral and your CDI unit can't find a ground through the neutral switch because the sidestand is down and your neutral switch is gummed up a bit (intermittent). When it won't start, does your neutral light work? May have a dirty connection at pin 10 on the CDI unit also.
I'm assuming that your engine always turns over. The problem is "no spark" - right?
