You mentioned you replaced the diaphram, I have done this in the past and I could not get it to run right either at the top end. So I went through and changed the pump valves and the springs which fixed my problem. It did not make any sense but all I can think is that with a faulty diaphram buy this stage those other compents might be worn as well.

I run 3 DZ160 & one DZ170 great engines heaps of power but as you would understand they do require more maintenance, the price paid for performance. Do those white plastic valves & springs and see how it goes.

Also how much work have this engine done ?