Thanks for the tips. Today I again checked the engine played with the needles once again but unable to get the power and top-end 500 rpms back. Furthermore the engine was giving weired sound too.

I opened the engine and figured out the piston side bearing of the connecting rod was having some play. I have to figure out how to open the prop hub so that I can pull the shaft out to check the main bearings. I shall inform once I become successful in opening it.