Powerstroke 3500 blowing flames out of tailpipe
I have a Powerstroke 3500 generator that I acquired as part of heap of tired equipment I bought as a package. Previous owner said he had no knowledge of what condition the generator was in. When I first tried starting it, I would choke it, give it a pull, and it would pop a few times like it was starting, but as soon as I took the choke off, it would die. Removed and cleaned the carb, replaced the fuel filter and fuel shutoff valve, but no improvement. Finally concluded that the carb must be the culprit, so replaced with a new one. Same exact issue.
I noticed that at the end of the aborted starts, a puff of exhaust would usually come out of the carb, so I decided to pull the muffler off next. Sure enough, the spark arresting screens on the muffler were quite jammed up with soot, and with the muffler removed, the engine was able to start right up and run. Now the issue was that a 4-6" blue flame was seen shooting from the engine exhaust port. I did some reading around the internet, and the prevailing wisdom was that the timing could be off, the valves could be out of adjustment or shot, or the engine might just be running too lean. This generator came without an air filter, so I got a proper air filter for it, thinking this might be all that is needed to change the mixture. No dice, it still shot flames from the exhaust. I made sure the flywheel key was intact and that the timing was correct, and my next step was to look at the valves.
At TDC, the rockers seemed to be putting quite a firm pressure on the valves. Based on rule-o-thumb internet wisdom, I adjusted the valves to .006 on the exhaust valve, and .003 on the intake at TDC. Well, now the pull starting is extremely hard (high compression), and it still just pops a couple of times but won't start. So no doubt, my valve adjustment did more harm than good.
At this point, I have run out of ideas--any advice?