Here is the outcome today..
I got to the flightline early to meet a buddy of mine who's been doing this since the day of the dinosaurs, when dirt was clean, controlled flight meant you aimed the boulder correctly...
He got to tinkering and checked on the tappets, fuel draw (he's got a cool do-hickey that tells you how much fuel is drawn to the carb, check the plugs and ignition... turns out my number 3 cylinder is actually plug 1, and the 2 cylinder is 3, and 1 is 2...
in other words... no other changes were made and the motor kicked to 4K RPM with the recommended needles.. 2 out on high and 6 out on low.
The motor ran great for 4 16oz tanks... each time allowing the cylinders to cool to the touch... average cylinder temp 195 +/- 10degrees...
on the fifth tank, approx. 60 seconds after running normally at about 3900RPM cylinder 2 (based on the drawing above) cracked at it's base so I shut off the ignition and found the head of one of the bolts on the floor...
Spectator assessments from the cheap seats agree that it was either running the engine for too long or oil-based hydraulic lock...
I'm going to see if this will be covered by Horizon Hobby.. I've never tried their customer service so this is very nerve racking.