OS FS 91 SII w/ pump question:

Engine sounds fine on the ground. idles nice and accelerates responsively. In the air its a different story. when cruising level flight at quarter throttle the engine seems to be running fast. I throttle up to 3/4 and pull up the engine sputters and RPM / sound of the pitch drops. worried the engine will quit I level the plane and the engine sounds fine at 1/4 throttle. I have the engine carb set at default. the Low at 1/8 turn richer. Am I running Rich or Lean? when the plane is cruising at 1/4 throttle not much exhaust smoke. when I throttle up I see a lot of exhaust smoke and sputtering sound. The engine does fine on the bench. I point the engine up and it sounds good. I'm turning a Master Airscrew 14x6 K series and Cool Power 20/20 4 stroke pattern fuel.