The propeller is a 10x6 to keep the engine lightly loaded until fully broken in.

Fuel is CoolPower 15% and yes, it is fresh.

Yes, I'm using a stock muffler. All engine parts are stock.

There are no leaks. The original post carefully details the double testing, and immersion testing that has been done.

Based on your reply, I checked for obstructions. With the needle valve open, I can easily blow air into the vent line at the muffler. There are no obstructions.

The engine is not in a model. I'm bench running it. I'm holding the tank to eliminate fuel foaming as the cause. I'm also holding the tank because I wanted to find out if fuel level with respect to the carburator is a problem.

Muffler is pressurizing the tank.

This engine has not been run to 12,000. Bubbles after the remote needle valve appear to be larger and obviously are flowing faster as RPM increases. Engine dies before it reaches 12,000.

What shall I do to fix it?

Doug