Mojo, you're forgetting one important part of section 922r.
You are correct that the Yugo SKS is importable only because of C&R status.
You are correct that any alterations void that status.
You are correct that compliance parts must then be installed, but ONLY because those who tweak their Yugos generally go for detachable mags, which is a non-sporting feature.
922r applies only to non-sporting rifles. The non-sporting features on the Yugo 59/66 are the grenade launcher, bayonet, night sights, and bayonet. Amputate those, and it is a sporting rifle. Go with a detachable magazine, and you are nonsporting.
The reason semiauto surplus rifles require compliance parts is because they are universally nonsporting. However, due to the fixed magazine and lack of a pistol grip, the SKS is a stone's throw from being sporting. Lose the evil features, and it is legally no different from a Chinese Norinco SKS sporter.
At least, that is my interpretation. I am not aware of any ATF rules that stipulate that once a gun is considered non-sporting, it can never be made sporting. If so, that would indeed make your position wholly correct, but I am not aware of such a ruling.
I have to ask the question, who cares? I have never once seen or heard of anyone in my state getting busted for hacking off thier grenade launcher/bayo lug/anything. Its not like the FBI is going to kick down your door for removing night sights. I think people are way too paranoid about this subject. Heck, almost every SKS I see at shows then are illegal. I guess I'm just not the kind of guy that worries over trivial matters.
I might suggest that saying "who cares" about following the law is not a wise thing to do online where there are records of everything said and by whom. The ATF is not in the habit of getting medieval over 922r violations. It is generally thought that such violations will be used as "tack on" charges if they ever bust you for something else. That said, it is foolish to disregard the law.
Most SKSs you see at gun shows are either legal due to C&R status, sporting status, or compliance parts. The Yugo SKS has a pretty convoluted status due to its C&R status and a hodgepodge of confusing federal rules.