If you had turned the compression screw out some and opened the needle valve, it may have cooled the contra enough to let it move. If that is the case, the pop you heard was the contra hitting the adjustment screw. No problem.
If you then leaned it out, the contra may have stuck again.
Use an intake prime to start. An exhaust prime may be giving you a false setting since it will fire at a too-low compression setting.
If it is running at a too-high compression setting, pull the fuel line and stop it, or richen it until the contra frees itself so you can adjust compression. Don't let it continue to run over-compressed.
Once you can adjust compression properly, keep lowering compression until it misses slightly, then increase until it smoothes out. Then adjust needle. Then do compression again, etc. Don't make final adjustments until it is at normal operating temperature. This will take about a minute. As it heats up it will need less compression to run.
Compression adjusts firing timing so you will find that as you change prop sizes (load) you will need to readjust compression for the optimum setting. Do a series of one or two minute runs, followed by complete cool down for break-in.
Don't give up on MVVS. I have two .15 diesels and three .09 diesels (and a .15 glow). All run well.
Note that these are only opinions, individual mileage may vary.
Edit: Additional thought. When you say factory head do you mean that you converted a MVVS .15 glow to diesel? My .15 glow is ABC and all my MVVS diesels are iron/steel. This may cause the binding you refer to, although I would think it would get more loose if too hot.