Running hte engine without the muffler almost definitely damaged the engines internals.

Please try these setup steps and, assuming they do not work, please send the engine in for service using the work sheets at www.hobbyservices.com.

The initial settings for the carburetor of your O.S. CV engine are easy to set.

First, close the high-speed needle valve and open it 2-1/4 turns out from closed. This is the initial setting, and is a rich setting. You will have to lean the engine from this point as you drive the car.

To set the idle mixture needle, which is the grey screw in the center of the throttle arm, inside the chrome barrel, you must be able to see into the carburetor. Remove the aircleaner from the carb so you can see what you are doing.

Open the throttle to the full-open position. Inside, you can see the idle needle and the fuel nozzle. Adjust the idle mixture screw until you have a gap of 2mm to 3mm between the needle and the nozzle when the carburetor is fully opened. You can also double-check this by looking at the head of the idle mixture screw. It should be sticking out of the chromed barrel by about 1/32". This is an initial setting, and is a bit rich.

When you start the car, you can leave the clip-on battery attached to the glow plug for some initial running. As you run the car, it will be a bit rough. Adjust the high-speed needle until it just stops running rough. You can then adjust the idle mixture needle and the carburetor throttle opening until you can have the car stopped, but with the engine running smoothly. If you release the brake or stop holding onto the car, it may tend to ease forwards, just like a full-size automobile with an automatic transmission. This tells you that you have the correct setting.