The saga goes on . . .
I was able to adjust the pump as per Bill's instructions; I was able to peak the rpms with the top adjustment, and control the fuel return with the bottom pump screw, but still could not get the engine to run below 5,000 rpms.

I have a carb off an old Super Tiger .75 that happens to have the same od as the 86 carb and is also held in via clamp system (as opposed to screws). Since it was a perfect repalcement for the big carb I tried it with muffler pressure and was able to get a reialble idle of about 2,000 rpms. The top end suffered from the smaller venturi with the best rpms at 10,800 vs. 11,300 with the big OS carb. This is with an APC 12-8 prop. When running on muffler pressure I connected a piece of fuel line between the "IN" and "R" and another piece between the "OUT" and "S" on the pump. After running the Super Tiger carb I put the OS carb back on. I blocked off the return line from the carb. The top end rpms were a little less than with the pump, but more than with the Super Tiger carb. The results were the same on the low end: the engine will not run under 5,000 rpms. I also tried the OS carb with the return vented, but the results were the same.

I have had the OS carb apart a few times now, but cannot find a problem. I looks to me like there is only one way that this carb with the mixture control and all can be assembled; hard to mess it up.

Right now I'm fresh out of ideas, and without another known good carb to try I may have to either use the Super Tiger carb or switch to one of my FX engines.