I'd recommend that you read through Frank Granelli's excellent article "Engines 101 - Part Two" about setting up and tuning .40-sized 2-stroke engines at the AMA's Sport Aviator web site:

http://www.masportaviator.com/ah.asp?CatID=8&ID=47

This information should help you check your engine setup and needle settings to help with tuning. Finding a fellow glow flyer who's good with engines would be even better. Good luck and feel free to post any additional questions as they come up.