I think you may be on the right track, valves. I had issues with a 20 hp kohler command. It has hydraulic lifters so clearance wasn't my problem. I did a compression test, passed. Did leak-down test, passed. I was told by local shop that my engine has head gasket and Valve problems. So I finally pulled the head off the cylinder that had a problem. Lapped in the valves and problem solved. So I concluded that compression and leak-down didn't really find my problem.
It sounds to me like you may have a flat head engine. If you have valve seat recession, you will have valve clearance problems. That will usually show up after engine is warm. If intake valve doesn't close all the way, it will push air backwards through carb resulting in too much fuel.
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Today's Featured Article - Old Time Threshing - by Anthony West. A lovely harvest evening late September 1947, I was a school boy, like all school boys I loved harvest time. The golden corn ripens well and early, the stoking, stacking,.... the drawing in with the tractors and trailers and a few buck rakes thrown in, and possibly a heavy horse. It would be a great day for the collies and the terrier dogs, rats and mice would be at the bottom of the stacks so the dogs, would have a busy time hunting and killing, all the corn was gathered and ricked in what we c
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