Epilogue:

Well, here's my final diagosis. The cowling did not have enough exit vents (plenty of in, but not enough out). The engine got hot. The 46AX has a brass AND a rubber head gaskets (from word of mouth, the rubber o-ring is new with the AX series). The rubber o-ring gasket melted and blew out. There is some kind of vent tube that exits between the engine case and the head but outside the brass seal on the cylinder head. This was leaking to the outside of the engine (visible). I replaced the head gaskets (both), increased ventilation around the engine. It seems to be working fine now.