I would start with adjusting the valve lash, and a valve train inspection. Look for broken valve springs, bent pushrods, watch that all the valves are opening and closing.
Then run a compression test. Don't worry so much about the amount of compression, but look for differences between cylinders. Ideally they need to be within about 10% of each other.
When you had the carb apart, did you check the float for buoyancy? Did you set the float level? Does the carb drip gas if the fuel valve is left on? Did you adjust the main jet? How is the fuel supply? If the tank is contaminated or flaking rust, you will have ongoing carb problems. It needs a clean, reliable source of fuel to function properly. Any of these things can lead to rich running, but before blaming or adjusting the carb, everything else must be in order.
I'm not aware of any engine that has drain holes in the exhaust manifold. Makes me wonder if possibly the manifold is burned out. Some are designed as a one piece intake and exhaust casting. On those, the exhaust can burn through internally and enter the intake side, which causes them to run terribly, similar to a vacuum leak but worse!
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Today's Featured Article - On the Road with Dave Gohl: Tractor Club Beginnings - by Dave Gohl. I was surprised about a month ago when I got a call from a fellow tractor croonie. His message was interesting and to the point. He's says "Dave, I've been thinking about starting a Two Cylinder club for our area. What do ya think?" It was a loaded question. I said that I would be interested, and was wondering what his next step was. (Although I was talking under my breath, since I thought of this some years ago) My friend, Arlyn Lamb of Lakeville, Minnesota was sincere in his miss
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