OK after some testing this is what I'm finding. Today I took the tank hatch off so I could listen how the engine was running while I could see the fuel level. Sure enough, yet very gradually, the engine slowly leans out. This is at full throttle with the plane level on the ground. I stood there and watched as a whole tank was burned. Started it and tuned it to a VERY rich setting. Stayed the same until about 1/4 tank (tank is 8 ounces), then it gradually started breaking into the 2 stroke sound and picking up a lot of rpms. Evenutally in the next minute it continued to gain rpms and completely break into the clean 2 stoke sound, no more burbling 4-cycling sound at all. It eventually ran completely out of gas. Absolutely NO foaming of the fuel is occuring here, none, so I know that's not the problem.
Now without touching the needle valve, I fueled up another full tank and started it. The result? It's back to the burbling stumblin rich setting, probably several thousand rpm lower than the end of the previous tank. Letting it burn another tank repeated the results of slowly leaning.

Question:
Can it really be that sensitive to fuel tank position? I noticed that the tank center line is indeed about 1/2 inch lower than the needle valve. I'm guessing this is the problem as nothing else is as obvious. All fuel lines are new, inside and outside the tank, so it's not sucking air. This sucks because now in order to have a longer flight, I'd have to richen it to the point where it's barely got enough thrust to take off to compensate for how drastically lean it will get by flight's end. I may just try to mount the engine underneath the rails instead of on top. This will lower the engine. What do you think?

Mike