Just a couple of things,
If it is "running rich" and the excess fuel is dumping back out of the intake side then I would guess that the problem lies in the carburetor. Zama Rotary? RB-XX?
When the muffler was off, did you visualize the piston and rings via the exhaust port in the cylinder? any scoring or metal transfer?
Timing slightly off? causing the engine to be way less efficient? Most of the Echo stuff uses the plastic flywheel with the key machined into the metal in the center. Is it partially sheared?
Lastly: Did you run it with the muffler loose or off? If not, I'd try that first. Some of the newer Echo stuff has a converter in the muffler that can cause a ton of problems. These engines are designed to run with a very specific "air pulse" going threw and even back after combustion. I have had my hands on several Pb-251 blowers that have had problems with the converters.
Just my opinions. Take what you want and leave the rest.
Thanks