Yes sounds like it might be an air leak....doesn't have to be a leak in the regulator. The regulator gets its pressure on one side from the engine...so it could be an air leak. Regulator gets one side of its pressure from the engine side of things. If there is an air leak in at the rear of the engine it might give air bubbles through the regulator.

Another option is to make the regulator a bit richer. Out CCW is rich. Dial it about 1/2 turn and try it again.

Its normal to have some bubbles at the 2000rpm idle. This is likely from foaming in the tank. what happens is the engine is being fed fuel that is under pressure. When it gets past the regulator the line from the regulator to the carb is no longer under positive pressure its under suction from the carb...only at the 2000rpm idle. SO when the pressure changes from tank positive pressure to the the suction from the carb a Small tiny bubble from foam in the tank will turn into a big bubble you can see. These bubbles go away after the engine goes above 2000rpm because the carb is not longer sucking the fuel...above 2000rpm the fuel is being force fed under positive pressure into the carb. This is why the low end air bleed screw only works at 2000rpm.

But a bunch of bubbles can affect things. You need to decide if its foamy fuel that is causing the bubbles or is it a leak in the engine.

So What I would do is open the regulator about 1/2 turn richer and try it again. See if you can stop the surging. The air bleed screw is only a fine tune for that 2000rpm mixture.

Hyde mount will have nothing to do with it. Its fine on a Hyde Mount.

Go for the Regulator open 1/2 turn and then see what happens. Try to put some foam rubber to mount your tank and not let it touch the bulkheads in the model. This will help the foaming. Also you can check the head, and or carb, air box bolts....make sure they are tight actually a little past snug not overly tight, The casting can get warped if you crank down on the bolts. Always tighten the bolts in a crossing pattern a little at a time like installing a tire on the family car.

This will insure that the part gets tightened evenly and doesn't get twisted.

Troy Newman
Team YS