RE: Mcculloch Eager Beaver 3.4
It's hard to tell what might be going on there but I know the Melody ignition systems are always suspect, always have been. Since you had similar performance with it on the engine it was designed for I would toss it. You could also try getting rid of the flywheel, put a 3 or 4 mm magnet in your new prop hub and make a new mount for the sensor so it could operate the way it was intended.