TVXL220-157246C 10 HP Tecumseh with automatic compression release. The engine starts and runs good but when it get a load on it, it loses power and dies. Here is my question. Can the ACR get stuck and not let the exhaust valve seat at high RPM? Or will a valve job fix it?
It would be possible, although I have never run across it. Even if it was stuck, it should not make a tremendous difference, as the rpm's increase the amount of time the valve would open should not be enough to create a substantial loss of power. There are bump type compression release that never disengage.
A lean mixture setting can also cause a loss of power, are you sure your issue is low compression?
When I took the head off and turned it by hand the exhaust valve would open back up slightly and would not appear to seat until after the piston would travel a little over half way up on the compression stroke. Just didn't look right to me then found out about the compression release. The exhaust valve looks to me like it's just not seating well.
Sounds like a sticky valve stem. Maybe pull the plug and spray carb cleaner around the valves while you are cranking it. Pull the muffler and spray the exhaust valve stem with carb cleaner. Run some marvel mystery oil in gas and oil. If all else fails, pull the head and check the valve and seat. Run a card around it to clean up any piece of carbon. Maybe put a little valve lapping compound in there and turn the valve some to clean up the seat if there is a seating problem. Then spray away all the excess compound.
Turning the motor over by hand is not fast enough for the compression release (ACR) valve to work the way your thinking. Only at a higher RPM will this disengage fully for it to seat the valve fully. Maybe above 400 RPM the ACR will fully open then the valve fully seats. If your valve is sticking open you will hear it "pppfffftttt" through the exhaust on that stroke while running. It will sound different then normal. I agree with justin3 on his suggestions. Carb is easiest to get to so I would do that first, then look at flywheel key.