1) The harddrive does not like the vibration of the bike. ... any other ideas?
Buy a honda?
Just kidding, I don't know too many people who put these into bikes. I would love to see some pictures. But I don't know what to do about the vibration. You would either have to stop the vibration (new bike?) or stop the vibration from getting to the device, which would need a lot of room around the Z2 to isolate it with different materials.
2) Of course there is no Parking brake on a Harley and when I just ground that wire I get the error about my istallation is faulty. I know if there is a mod to bypass the z2 this would solve that but until someone comes up with one is there a way to get rid of the pesky error?
Unfortunately, once you get that error, the only way to get rid of it is to reset the unit (recessed button to the right of eject). Now you want to make sure it doesn't come back. The only way besides bypassing it (not the best solution, but replace the Z2 hard drive with a Z1 hard drive and then bypass it like a Z1) is to not have that wire grounded while moving.
Action has a good idea on the neutral light (but I don't know much about harley wiring, I'm a japan/european kind of biker) but you could also hook it to the kickstand as well. When the kickstand is out, I think there is a switch that grounds a wire, you could hook it to that as well. And instead of tapping of the neutral light (if the harley has one) I would bet there is a wire somewhere that grounds when it's in neutral. The light then senses that and turns on.
But yes, like action said, either off the neutral sense or the kickstand sense.