Dave I got a similar, rather, identical problem. I hadn't run my engine in a few or so weeks prior to running it today. It is brand new and The last time I ran it I deadsticked it because I am running way rich still.
Anyway, I attempted to solve the idle problem by opening up the air bleed (idle needle). However, right a way, the engine seemed to be at a very high idle from the last time I checked it, then started dropping and surging, I ran it to full power and tuned the high end a little better and let it warm up. I brang it back to idle and brang the idle speed down a bit and it immediately died. It dies almost as if running out of fuel, but it starts back up immediately and easily, then surges, drops rpw to what one would think to be a stable, slow idle, then it surges and dies. I messed with different low end needle settings for an hour to no success. Is this a diaphram/plunger problem? is it possible that some fuel had gelled up in it and damaged it? Also, I am at 7000 feet asl - would that require me to adjust the regulator? BTW, I am running magnum 30% heli...