Thanks for that, Mark. Your experience is likely to be useful here. With regard to Item 2, the function of the small hole in the exhaust port is to act as a decompressor. If it is blocked it becomes difficult to pull the starter cord, but there should be no other effect. On the other hand if the exhaust port, spark arrestor, or muffler is obstructed, any point of performance could be adversely affected: those areas should be kept reasonably clean. Jaffa, to verify that the engine has a fair chance of operating perfectly, please check that the exhaust port and muffler are clear, and that the engine shows compression pressure of at least 90 psi (that is the minimum service figure: it should be 120 psi).

Jaffa, one point to verify here is whether your engine has electronic or breaker-point ignition. The earlier units had breaker points, and they have to be set up carefully (the manual specifies use of a dial indicator, like on the old Kirby Lauson 4 strokes) to get the right ignition timing. Your slight instability problem sounds as if it could be due to an ignition timing error, so we need to know which system your engine has.

It sounds as if your engine is very sensitive to the precise adjustment of the speed control cable, and the setting of the choke linkage. You should lubricate the cable, and ensure that it slides smoothly, with no hysteresis between opening and closing. (In other words, there is no wind-up in the mechansism, resulting in the linkage being in a slightly different position depending on which direction the control is moving in.) You will recall adjusting the mechanism slightly to get the kill switch to work properly. You may now have it out of adjustment at other points in its travel. Please check the assembly against this diagram and instructions:
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