Come to find out my new rear wheel I bought is for a different model - TX500. Good news is I can make it work, same axle size, same drum brake, same spoke size. Also seems to be an improvement because it has rubber spacers in the sprocket drive. The sprocket is different but the right one will fit on it with the correct hub spacing and sprocket spacing. Thanks to some help at xs650.com I know exactly what I need to do to make it work. 

http://www.xs650.com/forum/showthread.php?p=226126#post226126

I don't think I'll be cutting up the extra sprocket like 5twins suggests. I think I'm going to see what I can find for actual spacers of the sizes I would need. Shouldn't be too hard....... shouldn't be! I'm also throwing the idea around to replacing the rubber drive dampers with some RTV urethane. Can't be any worse than the fixed drive of the hub I meant to buy that should be for this 650 model.

Will follow up with pics when I can get the thing cracked open. It's not cooperating with me right now, and hammering on the lock ring at 4am isn't very considerate...