Hi Nick
I bought an XL500S brand new in about 1981. It was certainly up there with one of the worst handling motor cycles I have ever owned ( and I have had more than 25 dirt bikes) due to the difficulty in obtaining a decent 23″ knobby front tyre then (now time it will be a real challenge). The stock road/trail tyre was hopeless on fast gravel roads – constantly understeering and very difficult to slide around fast corners and when I fitted a knobby it wasn’t a heap better. I also had one of the 1st XR 500R’s at the same time and all though it was a bit of a pig by modern day bikes – it was heaps better than the XL500S at cornering.
My suggestion is to bite the bullet and get or re-spoke a 21″ wheel.