The great mystery is over !!
This little OS 35 I have and as I have said is brand new old, I honestly don't remember where or how I got it but I did. That was a preface to my tale: 4 or 5 days back when I finally started to fool with it during one of it's slight runs I noticed fuel at the head case seam so I tightened it up and yes the bolts were loose. This was my bad because I know better having spent many years with automotive situations. I should have dis-assembled it right then and there for inspection but I didn't. Any rate long and short of it is I started having thoughts that this is too simple a device to have all the problems I went through and in particular with not drawing fuel and there were no other openings in the engine to loose vacuum. I then took the head off and discovered that this engine had been gremlinized, some idiot took it apart and did not put the liner back in in proper registration with the crank case ports. The net result was that I had both intake and exhaust ports open at the same time, consequently the engine could not develop a vacuum, this is much in the same as installing the cam in a 4 cycle engine a couple teeth off which screws up the valve timing.
Bottom line: it runs like a bear and is smooth as glass and will probably run for a long time.
Thanx again to all that offered up help and put this little tid bit away for future reference,
Bob B..