The magnets should be clear or past the center point of the magneto.. A Magneto only fires (all systems) at the highest densisty of magnetic flux, called "e-gap" on the dischage of the coil as the magnets are passed/ passing the arm.
I don't think you have compound problems, you may have created a few .. You seem to be in this engine pretty deep, Are you sure you timing marks on the cam and crank are correct?
Changing carbs? epa Carbs?.... These carbs may all fit the same engines, but the carbs are made for the same engines doing diffrent things.... Put the original carb back on.. You may have a Vent on the carb that is blocked because it is mismatched with the wrong intake manifold / gasket or the carb is trying to run position (throttle setting) that the carb is not manufactured to pull a load at..
The spark plug gasket on the plug is a crush gasket, even though they seal fairly well more than once, they are made to only to seal once.. I bet you have had this plug off alot right? I supect it will leak now... Not to worry it will not effect running of the engine.. Don't change the head..
Have you checked the valve seats in your travels through this engine, how is the valve surface? or the valve guides... These issues may cause a rich running motor...
What was the first problem you had that made you want to break into this engine so deep?
We need a little more info to work this out..
Good Luck,
Friiy
