OK...I need to close this thread since non off the different theories that have been mentioned was correct!
I really needed to get rid of this machine this spring to make some room in my garage so I cleaned it up and tested it some more. Do you think it ran perfect? You fricking son of a b*tch of a crap machine!!!!! The same problem as before!! It started up fine...I ran it for a while and it just died again. More tinkering and the exact same behaviour...it would sputter and die, fire but not start, totally dead and so on. Frustration overload!
I started to suspect bad spark after all and now I have one of those lights that you put inline with the spark plug to check if there is spark. The engine was totally dead when I installed it. I used a drill on the flywheel nut and spun it up...it started right away!! The light in the tester flickered. So I stopped the engine, removed the tester and spun it up again...nothing.
OK, tester back on...started right up again!!? Now I could see a pattern for the first time!
After some inspection I could see that someone at some point had used vulcanising tape on the wire from the coil. This was in the part where the wire goes through the fins of the head so it was not easy to see if you were not looking for it. Removed the tape and put double heat shrink tube over the minute damage of the insulation and put everything back together again. I was so convinced that I had found the illusive fault I even reinstalled the pull starter. Gave it a pull and it fired right up and ran like a champ! I did some extensive testing with start/stop, mowing for half an hour, letting it cool down and do a cold start...it just worked!
My verdict is that the damaged insulation of the spark plug wire shorted the spark intermittently. It was juuuuuuust in the sweet spot for working and not working, so sometimes it was a fraction away from shorting and then something shifted and the engine died. Sometimes it was on and off, many even arcing from time to time, which made the engine run rough. When I used the tester the cable got far away the "sweet spot" so it worked just fine.
Anyhow, I sold the machine (with a healthy profit) about a month ago and haven't heard anything from the buyer...so I guess it's still working as it should! ?
Thank you all for your help and support! I guess that if I hade followed
[B]tom3[/B]'s suggestion in his first post of trying a new coil I would have saved myself a lot
of trouble and head ache! ? Well well...hindsight is 20/20 right?