You are basically at sea level so nothing extreme there. My opinion is that your fuel/nitro is fine, the OS-F plug is perfect, but that your issue is too lean. As others have stated when you get too lean you will get that "backfire" and will throw the prop. You also state that you are getting some knocking which also spells lean. I would not worry about what you think may be too much smoking. That will go away as things bed in with time on the engine. I also think that getting on a test stand to work things out is good advice.
Lars