Whoa, NEVER RUN A DAMAGED PROP!!

Even if the prop appears to be "balance" statically, it won't be aerodynamically, and will vibrate like crazy.

It might also be weak, and throw a blade.

If it's "shorter" as you said, it might not load the engine enough, and you will get bad engine runs (over speeding), or even damage the engine, if it's too small.

Please, get a new prop.

Ok, safety aside, see if you can find in the manual if they say how to reset the needles (both) to factory settings. Most low-speed screws don't need much changing. And they are VERY SENSITIVE. Make changes 1/4 to 1/8th of a turn at a time, very very small movements.

If it runs full throttle, and puts out a lot of smoke, you are likely rich on the high end, that's good for now.

As you reduce throttle, if the engine stops suddenly, your low speed is too lean. If it slowly "winds down" and then stops, or you see liquid coming out of the muffler as it's slowing down, then it's too rich.

Your best bet is going to be to find someone near you that can help in person, trouble shooting engines on line is really really hard, more guesswork than anything.

I agree that I doubt that chip on the outside of the washer is hurting anything. You should see the dents on the casing and cooling fins on some of my engines.