Highlander,
Well, that's not a bad approach if you've really had several guys who know engines look at it personally. The best way to "fix" a problem engine is to get a local engine gruru to go over it in person and make it work.

Oh, here's a good one I just remembered. One of my students had an OS .46FX, and it was cutting out whenever we went to full throttle. Not always, but most of the time. He had a K&B glowplug in it (1L or HP, not sure which). One of the local guys (not me) suggested replaceing it with an OS #8. I figured there was no way it was the cause of the abrupt quitting, but we tried it anyway. What do you know, fixed it right up. Now, I run K&B plugs in all my engines, including OS .25FXs, with no trouble. And I run mini-pipes (mousse cans) and 15% fuel.

We pulled an OS #8, and a K&B 1L and held them side by side. They are both listed as "Long" plugs, but wouldn't you know it, the K&B is noticeably longer than the OS. (Ill avoid any jokes about who's definition of "long" means what here)

Apparently that was driving up the compression and causing all kinds of troble. If we had tried two or 3 glow plug gaskets, I'm sure it would have fixed it as well. Or if the engine had been a bit older, when the compression isn't quite as high, I bet it would work fine. The smaller engines usually like a higher compression anyway, so that's why it doesn't bother the .25FXs that I have.

I don't think this is the problem in this specific case, but you never know.