When it's idling, what happens if you pinch the fuel line for a second or two? It should speed up slightly and then return to idle. If it simply dies when you pinch the line, it's too lean. If I recall , this engine has a two needle carb. The idle needle might need to be opened up slightly if it's too lean at idle.
Is the throttle stop screw allowing the barrel to close all the way? This might explain why it still runs with the barrel 'closed'.
Good luck!
Mark