Ok guys. This issue has been finally resolved. I had to buy an OEM air filter, and after installing it, MPG's returned to high 40's ( %100 city driving), which is slightly higher than before, but there's still a lot of room for improvement in the mpg area. Playing with tire psi, shorter warm up times, etc.
The problem was the combination of Dyna Pipes and K&N filter on stock jetting leaned the bike out way past what adjusting the pilot air screws could've helped.
Thanks for all your input guys!
2003 Kawasaki Vulcan 500
16,484 miles when I bought it September 2011. 29,100 miles January 2014. All these miles have been enjoyable almost entirely thanks to this forum.