Hi Daryl,
I am still new to old Victas and repairing small engines so I could be wrong. I have had the same issue on my Model 5 too and after taking the head off I found the cylinder had a decent cavity that lined up with the Carb side transfer port. It has run roughly on starter fluid before I noticed the backfire and then the cylinder. My idea is it can create compression to a degree however you can see when pull starting it there is a draft exiting the carb. I'm currently in the process of swapping the piston so I'll update if that solves my problem.
Cheers, Xav