I'm sure the lack of concern for your problems from the usual YS experts is because you bought a very old used engine. It probably needs a complete rebuild. Used engines are always sold because they don't run - worn out, crashed. You can check the regulator action on any YS engine with fuel tubing from the regulator to carb by:

1) Pinch off the fuel line to the carb. Take out the glow plug and spin the engine up at WOT for 60 seconds to pressurize the tank.
2) Un-pinch the fuel line to the carb. Pull off the end at the carb and turn the engine over slowly.

The regulator should open and close. The result is that fuel will squirt 10 feet when open and should not run at all when the regulator is closed. If the fuel will not stop completely at some prop position and drips, the reg. needs rebuilding.