I too have an older YS with the EXACT problems... couldn't get the needles to set the engine correctly, seemed that it didn't matter how I adjusted them, and it got very very hot!! I gave the engine to a friend who took it apart and he found that the intake valve clearance was too tight, the paper gasket in the pump was partially blocking the fuel ports. I'm now waiting on the pump gasket, plunger, and spring as well as new o rings for both high and low NV's.

I know this is just in this case but your description is very similar to mine. Good luck in getting it fixed.

By the way when I tached it I could only get around 8-8500 and it would die if held at full throttle, now after he adjusted the valve clearance and gasket he was able to get over 10000 with a 16X6. The pump is just acting a bit funny(air in lines) that is why I need the parts.

Side note,

Is the shipment of parts due in soon? (sorry if I should not post this here)