1/2 a gallon thats a pretty new engine. its weird that the seals would go bad with only 1/2 gallon. well if you can get it running good again by just changing the seals then i guess the engine is good.

i highly dought that your engine has any problems with the piston and selve if its that new. (unless it was driven lean or dirt found its way into the engine). at 1/2 gal you should still have a lot of pinch. i would tighten up all the screws in the engine. it wouldn't be a bad idea to reseal the engine. also if you have ever messed with the cylinder shims if you damaged one by accident it could couse an airleak.

im not familiar with the engine. but if you cant get it to run well i would defenatly consider new engine or rebuild.