I can say from the just the looks of the metering diaphragm it needs replacing. As the initial mixture settings it is 1-1/2 turns from lightly seated per Zama. Also check the metering lever (the lever that operator the inlet valve) and make it is level with the carburetor surface. Use a straight edge across the carb for this check.
Also note these mixture setting do interact so adjust L first then the H and not vica versa.
