Compression vs leak
A Compression Test is merely an indicater of overall integrity. The correct test would be a Leak Down test. Motors with 12 or 15% leakdown can still reflect a fairly good compression reading and still have valve issues. Most small engines will limp along inspite of poor compression or bad leakdown. So your probably looking at ignition timing if you've verified that the valves are opening and closing correctly. There is however an outside chance that this motor was asembled on a friday and the cam gear was assembled a notch or two off! Verify that your on TDC and both valves are closed. Seen it before.
A Compression Test is merely an indicater of overall integrity. The correct test would be a Leak Down test. Motors with 12 or 15% leakdown can still reflect a fairly good compression reading and still have valve issues. Most small engines will limp along inspite of poor compression or bad leakdown. So your probably looking at ignition timing if you've verified that the valves are opening and closing correctly. There is however an outside chance that this motor was asembled on a friday and the cam gear was assembled a notch or two off! Verify that your on TDC and both valves are closed. Seen it before.