Mine had a similar problem. I spent six months troubleshooting mine and finally gave up in disgust after wasting most of a flying season on it. I think they may produce some castings with manufacturing defects, maybe too large an oil weep hole at the front bearing.
Just return it for a warranty replacement. With luck the second one will be good. My recommendation (some will disagree) is to avoid that engine.
Last edited by JPMacG; 04-14-2014 at 06:40 PM.