With an O.S. I would do the break in with the engine mounted on the plane. as far as the procedure goes it is pretty straight forward. This is straight out of the book.
1. Install the proper propeller for your model. open the needle valve 2-21/2 turns from the fully closed position and start the engine. Run the engine for 2-3 minutes with the throttle fully opened but with the needle valve adjusted for rich four-cycle operation.
2. Now close the needle valve until the engine speeds up to two-cycle operation and allow it to run for about 10 seconds then reopen the needle valve to bring the engine back to four-cycle operation and run it for another 10 seconds. repeat this procedure until the fuel tank is empty.
3. Refer to idling adjustment section and fix the idling position where the lowest possible r.p.m. with steady running is obtained.
4. Re-start and adjust the needle valve so that the engine just breaks into two-cycle from four-cycle operation, then make 3-4 flights avoiding successive nose-up flights.