Very cool, at least .. first more modern Bultaco Sherpa (should be a 199 or a 199A) rebuild coming up ... very pleasant!
I'am also rebuilding a 199, (later B model).
To the gas tank, this item is made out of Polyethylene, (PE), any coating on this very flexible plastic is difficult,
but not impossible. As gas tanks from this model wasn't painted I personal would go for a very well clean up inside
and outside leaving it first as it is. Later one you can thing about what to to if you get the petcock problem solved first. (There are replikas available in PE and glassfibre.
(Normally new O-rings and a little bit bigger screws will do the job for getting the petcock thight again.)
Cleaning the carb is a good first go, as residues from gas gum f.e. can clogg the carb internal ducts and jets,
you might take a look inside the gas tank and the petcock too.
The mentioned Mikuni was not standard, they where fitted with a BING 84 type by-pass with 28mm.
Sherpas need a really good spark, good plug, good points and a perfect timing TDC.
gap point: 0,4mm
timing: is between 2,5 - 2,7mm before TDC,
plug: #bosch W145-T30 or Lodge CLNY or Champion UN-12y or N-12y.
Very important for a good start is a free and clean well oiled airbox/filter.
Something to check out, the clutch, (all steel plates!) and primary runs in own oil, really good synthetic ATF is recommended by practical experience, or for first check out: 300cc SAE 30, (clutch might feel slippery with SAE30).
The engine with its, huge rotor, extra flywheel and heavy crank is a real tractor, feels a little bit sleepy but with tons of torque just above idle, the engine does not like high rpm.
Gearbox has own heavy duty oil, 600cc SAE 140!
Looking forward to any progress!