Jake 1650 backfires out intake

Hi guys, I am looking for tips on the next step to take with my Jacobsen Homelite 1650 kohler K341AQS.
TLDR is it runs smooth at low throttle, and violently backfires out the carb and dies at high idle.

I am looking for advice on getting this machine running again as it has sentimental value to me and I have a couple parts machines and multiple tillers, mowing decks, snow blowers etc. However it doesn’t do any job I don’t have another tool for so it doesn’t have to be in a hurry.

To start things off the old engine was sounding a bit off since the spring so it got a new plug and some Techron in the tank, fired up, sounded good at 1/2 throttle as I was putting my ear plugs in to start mowing I heard a snap and it died. Cranked it over, no compression. Bummer.

I have 2 spare engines, one with no compression broken con rod, one unknown but at least with some resistance to turning over by hand.
So I put the unknown engine on just to see what would happen. Crank no spark, so I swapped ignition components from the old engine one at a time until I got to the points which fixed the spark issue.

Engine fired right up and Idled smoothly. I wouldn’t swear to it now, but I am pretty sure I tested it at all throttle positions including full throttle. Shut the engine off and attach all the accessories, drive line, pto, sheetmetal etc. Go to start the engine to cut the grass and nothing. Bummer again.

After fiddling around for a while swapping carbs etc I discovered that at choke +high idle with the air filter off it was shooting little fire balls out the carb, and that 1 fireball warmed it up enough to then start at closed throttle.

No matter how much it warms up at low throttle it will sputter then die right about half throttle.

I have already re-gapped the points and verified opening roughly corresponds with the S on the flywheel checked valve clearance, and soaked the cylinder with marvel mystery oil through the plug hole. I don’t have a proper leak down tester, but I get roughly 65 psi cranking losing 5 psi after about 4 minutes and 10 psi after 15 minutes.

If you are still reading after all that give me your best diagnosis and opinion on my best next step.
 
I am pretty sure you need to pull the head and make sure the intake valve opens and closes freely. Check both valves. It sounds like the intake valve is still open when the spark occurrs. Either sticking or no clearance so it can fully close. Then remove and lap the valves and set them to the correct gap. (I always have to lookthe valve gap up.)
Another thing is to check the ignition point gap. I think .020 is a good start, but I recall one 16 hp Kohler that needed the point gap closed down to .016 to retard the timing enough the starter could easily spin it over. This was after the new camshaft with compression release was installed and valves done and new rings.
 
I was wondering if it was maybe a burned valve. The valves seem to move freely at cranking speed when viewed through the side cover where you adjust clearance.

Any way to check/ confirm without pulling the head?

If I have to order a gasket and bolts to pull the head should I plan to do a complete rebuild/ reseal?
 
Ok, good information thanks. If I am pulling the head it will probably become a winter project, tear down and inspect the engines, figure out which is best, or rebuild both, order parts and take my time. To many other chores during the summer, and it would be a fun activity to do with the kids when its cold.
 
I have an old Stihl that sheared the flywheel key when the chain suddenly seized in a tree. Couldn't even pull the rope to turn the engine.
 
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