AHA!! Finally a thread I can contribute something usefull to!
I read where someone mentioned a tail swap to a GT250/650 tail and searched out the results. I owned a GT250 for about a year and a half. Sort of stumbled into the deal. A friend of a friend of a friend could get the GT250 in the crate for $2000. I figure for that price, what the heck.
The frames are indeed very similar but have a few different dimension to accomodate the v-twin mount points vs the parallel twin motors. Super fun bike. I've ridden quite a few different bikes from old UJM's to modern super sports and this bike handled spectacularly, after a fork oil change and some added spacers to accomodate my weight. Effortless to ride and maintain. Lighter than the GS500 (at least it felt that way don't quote me on that).
As far as "hyosung engines blowing up", there were a handfull of 2005 models that dropped valves. There were many many theories on why they did ranging from the AIS system being to close to the valves to just bad valve machining. Truth is it was only about a dozen bikes in the US. Can't speak for the rest of the world. shaZam! happens though, what can you do?
Ah and an FYI on the GT650, they have been popping up all over the place brand new for around $3200. Hard to beat that price...