Float Adjustment Procedure
Some symptons of a too high level are, 

 1. The choke does not work properly. 
 2. You'll see liquid spitting in the end of the exhaust after initial start up. 
     The carbon deposit will not be uniform and you'll see streaks or liquid stains. 
 3.Your exhaust pipes are eternally black no matter what you set your jetting at. 

 Use a good set of needle nose vise grips to break the tightness of the screws that hold the
    float bowl to the carburetor body.
   Others have used a Dremel grinding tool with a cut-off wheel and cut a slot for a sloted
   screwdriver, or even cut the head off if worse comes to worse.
   Replace with Allen head screws.

Can this drain pipe be adjusted to point down or towards the outside of the bike? 

The drain pipe is fixed, so don't try to move it.

 How does the tube attach to the bottom of the carb? 

To the drain pipe mentioned on the bottom of the float bowl.

 It appears that the 1/8 inch will work but it is REAL TIGHT.  the drain
 pipe (nipple) on the bottom of the carb points inwards towards the motor. 
 the tube must attach, make a 90 degree downward turn the
 another 90 degree turn towards the outside of the carb, then another 90
 degree turn upwards alongside the carb. 

 There is an allen head screw on the bottom of the float bowl facing the rear.
 You open it to drain the bowl. Then leave it open and put your clear tube on it.
 Try to keep it level underneath and run it up along side the side of the carb
 towards the front. The measurement must be taken at the front of the carb,
 because the bowl slants down in the rear. With tube in place and fuel tank pet
 cock open, turn on the key. The pump will activate and fill the tube and bowl
 and stop when the floats cut it off. The level in the tube will indicate the level in
 the bowl if you have done it correctly. There should be no bubbles in the tube.
 If you move the tube slighly up or down the level should correct itself and
 return to the same level. The manual recommends 1 to 2mm below the mating surface. 
 set the level according to the book, If you are 1 to 2mm above, leave it alone. 

 Note from Cal /LtoR
On the float level....there are two mating surfaces, a "front (air cleaner side),
   and a back (intake side)...the back is 11MMs higher than the front. I had set my
   level using the front mating surface as a reference...since then I have had a
   problem of "running out of gas" if I do a full throttle run through the gears, at
   about 85 in fourth the bike would "stutter", back of on the throttle for a few
   secs and away you could go. Thanks to Wanderndude for pointing out that the
   mating surface to use is the back mating surface....if you look in the manual, I
   forget the page, it does appear to be the back mating surface they are
   referencing but no where in print (unless I skipped over it) does it make this

Unfortunately there is only one way to measure and adjust. 
Measurement must be done with Carburetor on the bike and letting the fuel flow. 

The adjustment is by bending the metal tang,  pull it apart and bend the tang so the level
   is too low. 

With the carb upright, bending the tang UP (toward the float valve) will LOWER
   the fuel level.

Then put it back together and put it back on the bike. Now all you
   have to do is check the level and remove the bowl and put a light pressure
   pushing the floats upward to raise the level. It's simple to go up, but if you go
   too high, you have to take it apart and start all over.