I cannot tell from your posting what your inputs are and what your goal is.

It sort of sounds like you're trying to generate the reference string given only the input string and CIGAR ID... or maybe you're just trying to "fill in" the deletions (but not remove the insertions)?

It would help to have a very clear example of what you have to work with and what you're trying to generate. Even if you have to do the first one by hand and explain how you did it, that would help me understand your goal.

Often when some code seem hard to write, thinking about how to do it with physical objects helps. For example, you can derive all sorts of sort algorithms by thinking about how you would sort index cards by hand given certain sets of constraints.