Big post warning!
I think AJDragon nailed it with the glazed clutch shoes. Get some 100+ grit sandpaper and sand the glaze off them. Not too much, just enough to rough them up. You can also sand the inside of the clutch bell, it may have some clutch residue on it.
Don't worry about the fuel on the air filter. Just clean it thorougly with dish soap, let it dry, and re-oil it. (If you don't have air filter oil, get some now.) I would recommend getting a 2-stage air filter that has an outside dry element. I think someone makes a 2 stage that is nearly identical to the stock, so you may be able to just pick up the 2nd element that goes over top of your stock filter. You'll get better performance with a 2 stage because the oiled element won't clog as quickly.
Fuel boiling as it hits the carb.... could be a few things. Itself it is not damaging, but it could be a sign of something wrong. It means that your carb is too hot for some reason. I'm not sure if a glazed clutch would cause heat here, but a worn main bearing will. I also noticed that when i ran 15% nitro fuel, my engine ran very hot even while making good smoke, and sometimes got hot enough to boil fuel at the carb. Switching to 20% made this disappear. What fuel are you using?
As for lsn needle tuning, I can't tell it better than frost did, so here is his version.
ORIGINAL: Frost
The issue of tuning comes up frequently, so I thought I'd modify a piece I did about big-block tuning that has been floating around the Savage forum. A variation of this was told to me a while back.
Guys, FORGET about asking what other's settings are, once you do this a few times you can take any old strange engine (meaning one that is working, but unfamiliar to you) and start from nothing, that is, knowing NO settings and get the most out of it.
For some reason even in the mags when they tell you "how to tune", they have you pinching the fuel line and timing the result in seconds to "set" your LSN. No doubt this is a good way to get in the ballpark, but it is FAR from precise.
The following will asume that you have your top-end tuned to a decent temp. range for your normal style of driving. If you AREN'T running lean (stuttering, you hear it, you know what it is) you can very safely tune the top-end to 250-260 with no reduced life (AGAIN this is if it isn't going LEAN). This temp. is a range for many, but not all smallblocks. Some like to be run even hotter (TRX 2.5 makes it's best power at 275F +) Once you get the top-end set here is how to really make it take off fast. If you are heavy-fingered this may be better for the pavement. Before you begin tuning the LSn, get the engine up to operating temperature first.
1. Since off the line "snap" can be given or taken away by being lean OR rich on the LSN the first move is a guess (well it won't be after you get a feel for it, but this will get you going quickly)...
2. Pull the truck up in front of you and let it idle for 8 seconds. Then pull the trigger to WOT... Did it scream and take off? If no:
3. You have to go one way or the other... choose richer or leaner (suprisingly to many beginners, off the line stutters can be caused by too lean conditions just as easily as too rich) and turn the LSN in that direction 1/16th of a turn. Make a short pass at medium to high throttle and return the truck to in front of you.
4. Let it idle 8 seconds and floor the throttle. Did it take off better or worse? If better, turn it a 1/16 in the same direction, if it got worse, turn it 1/8th the OPPOSITE way. Either direction you started in, now you will be going one way based on whether it got better or not... either richer or leaner.
5. Make another short pass at medium to full throttle (AFTER you made the change to the LSN) and return the truck to you. Let it idle 8 seconds and floor it. Is it still getting better? If so, continue to lean or richen using the pass/idle 8 seconds method until you lose preformance and back up a step...
If your temps are in range this is how to quickly get your truck to "explode" off of the line... Always make the pass to clear out the engine and then let it idle 8 seconds. The idling will allow it to either lean out or load up, depending on which way the current settings are off... Get the hang of this and your truck can really take off. If you end up leaning the LSN out excessively make sure to keep an eye on temps, your top end needle may need a bit of enrichment.