So I got sick of messing with the Magneto and threw down the $350 for a PowerDynamo from Germany. I ordered it on a Monday and was installing it Thursday night. The instructions were clear and concise; I would have gotten it on the first try had I not forgotten to pop out the key on the end of the crank.
Wiring was super easy and eliminated a bunch of headaches, the system is now 12 volts, there's less stuff everywhere and you don't need much of a battery since all it does is power the lights.
I got everything installed, then made a few final checks. It started on the fourth crank on my bench using my arm. It ran like a quartz watch.
I've since had it off the lift of course, and I have been riding it like I stole it. What a hoot. It doesn't miss a beat, idles like a Falcone, and runs smooth and fast through it's four gears to a top speed somewhere around 60 I guess -- I could care less how fast it goes, this thing is a HOOT and it handles miles better than my old Parilla.
The little Stornello has turned into one super-awesome ride that is a serious blast around town, and the cafe-bike look is perfect for it.
Thanks to everyone here for their help. I will never build another bike without a PowerDynamo unless it is a very serious restoration. For rider-bikes, they are a MUST.