Hi Dave,
I bought this engine this past summer to go in a new plane and was happily breaking it in the other day. After 6 to 8 tanks of 20/20 at full throttle with a very rich needle setting, I began to dial in the mixtures. I leaned the high speed to a slightly rich setting and began to work on the low end settings. Ugh! Very rich from 1/2 throttle to idle. It would not idle for more than a few seconds at factory settings. So I leaned out the idle screw until it would at least idle (though it was eight stroking most of the time). Still very rich up to about 1/2 throttle. Scratching my head, I began leaning the regulator screw and noticed an immediate improvement but it was still too rich. With a combination of leaning the idle screw almost all the way out and turning the reg screw almost all the way in, it would idle OK but from just above idle to 1/2 throttle it was still very rich, surging, lots of smoke, oil, etc... Scratching my head intensely now, I began to read posts of what other people were saying and what the possible solutions might be. I tried some of the suggested solutions, 30%, new glow plug, etc.. all the while just knowing I was not going to have any success. I already know what you are going to say Dave,
"Sticking regulator plunger, Send it in." OK I'm sending.

That's exactly my thought, so I guess you beat me to it.

FWIW, I have had exactly the same problem as all others on this forum re the YS-63S. Brand new engine purchased about a month ago. Fuel dripping, too high idle, bad transition, dying after throttle down, etc. Last weekend, after many many tanks of rich settings, I started really paying attention to the engine - Top end is now running 11,500+. Low-end needle is open about three turns. I closed it fully clockwise first and then opened it about 3 turns. YS recommends one turn out.

I then started playing with the regulator and lo and behold, I now have a low end idle of about 2,800, a high end of about 11,500+ and a very smooth transition from low to hi. I also have an enormous amount of power. The engine is mounted on a CAP 232 World Models Aubuchon model. I have nearly infinite vertical now! Oh, also, no fuel dripping any more either from the carb. My reg setting is such that the reg screw is slightly above the reg housing. High end needle is about two fully open turns.

My guess is the regulator material and the spring need to "break in." Also, I think this engine may be way to touchy re needle and reg settings.

I have quite a few YS engines, both 4 and 2 stroke. This one was a bear to set. I am hoping that it will keep and that it won't revert back to its previous state of malfunction.

I run a 4 stroke YS plug and Magnum 30% or Coolpower 30% heli fuels. I am really a heli guy at heart but playing around with planks a bit these days.

Glad you figured it out. Most people don't have the patience required.