ORIGINAL: psuguru
It seems to me that the issue is that, because you can run at full throttle in the vertical and the engine dies when you throttle back that the tank pressure is causing a rich cut when you throttle down. I think you maybe have too rich an idle needle setting or the air-bleed for idle needs opening a bit. Are you using a non-return valve on the pressure feed?
Personally, I'm a big fan of Perry pumps and, although they tell you not to, I use a return to the tank from the needle to avoid fuel over pressure when throttling back from high speed.
I could try to lean out the low speed needle. I'm not sure where the air-bleed for the low speed needle is. The only adjustment I can find for low speed is the screw inside the throttle arm.
When you say Non-return valve, can you elaborate? The engine is a basic setup. Tank has two lines, one going to carb, one going to exhaust.