RE: Weird engine problem.
I missed the idle at 3500. That is a sure sign that the mix and high speed are not balanced. Try my tune up and see if you arn't happy. My Mag 70 sill put put along a 2000 RPM for about as long as you want. After I got the carb adjust right. Before, it was at leas 3500 on the idle and the more I played with the carb the worse it got. That engine forced me to learn how to turn a 4 stroke. The key is starting form the factory settings.
Like I said in my first post, you can end up with a rich Highspeed and very lean mix control and at this setting, you will find the top end is sort of OK, but the idle sucks.
By the way, this engine is slow to break in. Keep the top end at least 500 RPM off peak to the rich side for the most of your first gallon of fuel. Then you can peak it a bit more to 300. Chances are though that you will not need to as you almost never fly full throttle and 200 rpm wouldn't be noticed anyway.
Don