Yep, those machines pretty much require the air box/intake be hooked up and sealed tight to run right. Check the intake boot for cracks/leaks with a couple squirts of ether while its running.
The surging at idle sounds like a carb issue.
You said "changed the carb"...to new or used? ...was the diaphragm or pilot screw messed with? (ie. the tiny spring,washer, o ring properly installed?)
diaphram leaking, misalligned, pin hole?
...impulse line checked for leaks/cracks? ...vent lines clear?
Breaking up at higher RPM sounds like a limiter/cdi issue that is common for those late 90's machines.
You said "replaced cdi"...New? ...correct part?
You said "unhooked the reverse limiter" are you talking about disconnected the button or have you removed the black wire from #31 under the hood?