It was already giving some starting troubles few months back - like engine would crank but not start. Usually just hitting the sides of the carbs would solve it and I thought it was something to do with float height adjustment. Got lazy and never bothered to check completely.

Then the bike sat for about two months and a couple of days back that I try to start it, although it started but kept stalling on the stop signs, to the point that it did not start. So I come home thinking that the carbs might be dirty, but when I removed the airfilter I see an inch of gas at the bottom of airbox.

What might cause the gasoline to come in airbox? Bad petcock? Bad o-rings? Bad float height? or?

UPDATE: as i took out the airbox I saw that the drain pipe was bent at two places preventing the oil to drain out.
UPDATE: I checked for float height, looks like it was off. The o-ring is also gone. Do I need new float needle too?

Wow! It's time to overhaul the carbs  
The only time I've seen needle worn like that was in a picture from GS service manual  

I've seen plenty like that, and they do work ... what they tend to do is catch the edge of the spigot a bit more. If you use it regularly It could be fine. However you really want to test it for sealing up as well as, remember that it usually will get worse with use, it could work a long time with good care and use but yea its on it last legs.
Cool.
Buddha.

Hope this helps....

http://gstwins.com/gsboard/index.php?topic=54580.0

So after a month of waiting for the new float needle and o-ring, I finally managed to put together everything today. Was quite hopeful that the poor running issue would be solved, given that I cleaned cabs and replaced the rubber inside. After putting everything together, went on a short ride. The ride was much smoother then last time, but however hard I try, I was not able to set the idle to the correct position. The bike just died on me on several stop sign, or else it was rev'ed up a lot...

....came back home disappointed. Was thinking what to check next - then I saw some gas come out of the drain pipe of the air box, as I touched the end of the drain pipe the rubber/plastic just cracked. There was a big hole there which I guess was letting a lot of air to get in... used a lot of black tape to fix it and took it again for a ride.. the bike was completely smooth...

will ride it a couple of more times to see if that was indeed a problem and update here