If you are using a castor-based lubricant in the fuel, it is possible that varnish is the problem. Castor varnish slowly accumulates on the piston & sleeve creating internal friction and robbing the engine of power -- the symptoms can be similar to yours. Is the piston &/or cyl sleeve covered in a brown deposit? If so, that could be castor varnish. Dissassemble the engine & simmer it in a pot of auto anti-freeze for several hours (do it outside), then wipe or brush of any remaining residue. Clean & lube the parts with ATF, then re-assemble & try it.