Motorcycle Repair: 1985 700cc Yamaha Maxim electrical, circuit switches, electrical tests

Question
I have an 1985 700cc Yamaha Maxim (XJ700N). The bike starts and runs great since I put it back on road last summer. Just yesterday, the flashers, horn and break light stopped responding. The lights are not burned and are on. When I have the bike in first gear and holding the clutch in idle and bring down the kick-stand, it doesn't stall as it should. I checked all the fuses and they are fine. One under seat and three under cluster. Another thing, while riding at approx 40mph to which the rpm should approx be at 3500prm, it reads 1000 and as soon as I try using the flashers or hors or break, the rpm drops to ZERO and goes back up to a low 1000 when I de-activate the flashers that don't work or break light or horn. This is very weird as the bike starts and runs very smoothly as it should. If it is as someone told me that it could be a ground problem, I'm not sure how to fix that. I connected a wire to the battery negative to a good ground but that didn't do anything. Any suggestions? Pleaseeeeeeeeeeeeee :)  

Answer
Hi Stephan,

I suspect the source of the problem may be with the CDI, circuit switches, or caused by water shorting (rain/washing).

A loose or corroded ground connection may have similar syptoms.

I would have to perform electrical tests to accurately diagnose the problem.

Respectfully,
Mark Shively