Honda GCV 160 starting problems

[bonusbuilt1950]

Customer brought me a Troy-Bilt log splitter with a Honda GCV160 engine on it. He says they were using it, shut it off for a few minutes and went to restart and nothing. I get it here and try to start it and it would run for a couple of seconds and then die. After that, it would occasionally make a pop thru the exhaust. I thought it was out of time. Checked flywheel key and it was fine. You can see it sitting in it's slot on the crank. Checked coil for spark and it has it on every pull. Air gap is within specs. I did find the valve cover dented in on the bottom curved area. Took it off and fixed the dent. It has a wheel like device between the valve springs with a spring loaded arm on it, Compression release? Not too familiar this engine. I usually get them for broken top studs for the coil and cover due to the galvanic reaction between steel and aluminum.
Can someone tell me the valve settings are and do you check them at TDC? First one I've gone into. I also have the carb off and in the ultrasonic cleaner to make sure it's not plugged with dirt. Any tips or info would be a great help. Thanks!

 

[Scrubcadet10]

valve clearance is .006" for intake and .008" for exhaust.
i do valves with the OVOOVC method, One Valve Open, One Valve Closed. Adjust the valve that is closed. for instance. Exhaust rocker arm is down, adjust the intake valve. and vice versa.

 

[Bertrrr]

I have the same engine on an air compressor, make sure your oil level is high enough, there is a kill switch on your oil level to keep from burning up the engine when low on oil,
Also had to open up the vent on the fuel cap ,