I looked through my pics but I didn't take a pic of a bushed Drone engine cylinder sleeve. But the pics I did have show a lip on the top of the cylinder so you are Ok in that respect. yeah it is easy to get the cylinder sleeve in wrong. Also the piston as well. There is a cutout or notch in the piston that corresponds to the transfer port. The bottom of the piston skirt matches the intake port on the back. I had to think about it a while to be sure.

On mine I had to close the needle valve up, then get the engine to run off the prime for a second, then slowly open up the needle valve. it seemed to be quite sensitive at first. But once I got it in the ball park and the engine would run, it turned out to be OK then. The needle holder has basically a brass tube and no shoulder or step inside, so the needle would block the spray bar hole off and the taper would gradually open the hole up. Sort of in reverse of what we normally see nowadays where the needle butts up against a step of seat.