Thanks for all the suggestions, can't wait to try this engine again.

hobbsy,
Do you use a 12*5 prop for break in too? If not what size did you use for breaking in the engine.
I want to use a larger diameter and less pitch prop too, but I remember that all needle values and setting must be re-adjusted when changing differents size of prop. Would engines behave so different with different props?

Homebrewer,
Thanks for the comment regarding possible missing head gasket! You have saved my day when I found out that mine is missing. I would say the gasket is a must-have because it makes the fit much tigther.