ok guys got some new developments, with the MUFFLER OFF I sarted the engine up, and like before It needed full choke and about 50% throttle and smoked heavly for only a minute or two, then the smoking almost completely stopped. At this point I slowly took the choke out little by little until it was off completely then I messed with the throttle going from full to idle and eveything in between. Still no smoke and the engine seemed to be running happily with a slightly rough idle and heavy backfireing when ever throttle was quickly reduced. I decided to take the machine out for a test drive and it did pretty well, seemed to be lacking a little bit of power and would die under heavy sudden load but would start right back up.
I investigated the muffler closely and foud some cracks on the back side of it and after banging on for a while I managed to get about a 1/4 cup of what looked like rusty carbon out of it, some chunks but mostly powder. at this point nothing else is coming out of the muffler and I dont hear anything rattleing around inside it.
So after letting the engine cool COMPLETELY I crossed my fingers and tried starting it up. But it did the same thing, needed full choke and 50% throttle to run until it hit operating temp, only then could I dump the choke and play with the throttle, however the smoking seems to have stopped for the most part, I would say its atleast 90% better but smokes significantly more on cranking start up and when shutting down.
At this point Ive got an engine with no muffler, that needs to be choked till it warms up, doesn't handle sudden load well at all, moderate all around power loss, smokes a little bit, and back fires when throttle is reduced quickly.
Who wants to take a stab at it now??? ALL input is welcome
Thank you all again for taking the time to help a stranger out