Althought it's expensive, the OS #8 plug should work fine in that engine with that fuel. You didn't say what brand of fuel you're using though.

If the exhaust is a dark brown it's possible you're running lean and overheating. Though with out knowing the brand of fuel, I can't tell for sure. (and assuming it's a brand I'm familar with).

I think a 10x6 is a bit small for that engine (depending on the brand of prop). Combined with a lean run, it could lead to overheating and performace very much like you describe. (I once had overheating problems due to a bad cowling job, and the engine would die in a way that was simular to what you describe).

Try a slightly bigger prop, say a 10x7 or 11x5 or 11x6. I happen to like APC for a brand. If you're using the black Master Airscrew props, they do tend to load the engine less, resulting in higher RPM

However, I honestly think your biggest problem is still a lean run.

Try starting really rich, like Jim and I said. You should hear the engine "4-cycleing" at full throttle. That is, the exhaust note sounds noticeably different, as if the engine is missing every other stroke (which, in fact, it is). Then slowly move in the needle valve. You should hear the engine "break" from 4-stroke to 2-stroke. Usually you get a few clicks where the engine kind of wavers back and forth, then a couple more clicks lean and the sound turns in to a "clean" 2-stroke whine.

If you are just learning to fly, you can take off with the engine just barely out of 4-stroke, and you'll still have plenty of power.

If you've never heard the difference between 2- and 4- stroke operatoin, you've never been rich enough. Back out the needle more.

It's possible (though I haven't seen anything to tell me for sure) that you have some dirt or debris inside the carb that is causing lean runs regardless of the needle setting. Not likely, but possible.