RE: how do you stop syphoning
Pretty simple. Remove the two allen head screws and take the assembly off the motor. Rinse with raw fuel and replace in the same manner it came off. You can also make sure that all the ports are clear and that there isn't any build up from raw fuel. The regulater screw should be flush with the case. The low end needle should be 1 and 1/2 turns from closed and your original starting point on the high end was correct at 2.5 open. More than likely if you have fuel pouring through after prime, the regulator is "stuck" open. When you remove the assembly there is a small plunger that should move up and down. The plunger is spring loaded so that when you GENTLY push it down it will return. The up and down motion is a very small amount, but it should move and return. If it isn't, then you may have an issue with regulator functioning correctly. I have attached the FZ instructions as a starting point.
Lastly, make sure you are using an OS F plug or a YS 4 stroke plug. Also, I highly recommend the Cool Power brand of fuel. If you run the motor dry after flying, there can be months between flights and no issues when using Cool Power.
Jimmy Skids