In the course of shipping the engine, it will get tossed about and possibly the float assembly/needle valve took a hit.
When you use the choke, you are actually enriching to compensate for a fuel starvation condition.
OK, the oil level is correct.
As you pull start the rope, can you 'feel' the engine's compression? (this is a quick-check of engine compression)
We have spark at cranking and running. You say the engine ran good at first.
We have fuel reaching the carb. ***ensure the fuel shut off valve on the carb is in the full OPEN position***. Take a fuel sample, let it settle in a clear class jar. Is the fuel contaminated? There is a small fuel filter inside the fuel line at the fuel tank outlet. Pull the hose off the tank and you will find the filter either in the hose or stuck up in the tank outlet hose fitting. Ensure it is clean.
Do a good visual inspection of the throttle linkage and governor linkage to check for possible shipping related damage. Ensure the carb mount bolts are secure and snug. This will check for a possible vacuum leak. Manually open and close the throttle. Is it smooth and non binding?
Remove the air filter cover and inspect carb throat with a light. Perhaps turn IN (clockwise) the throttle stop screw one turn and try to start engine normally. This will compensate for a mis-adjusted curb idle speed setting (throttle closed too much at idle to run properly).
Still no luck? Everything looks good up to this point? I would suspect a carb idle circuit problem. This is where you clean off the ole work bench and have a fresh can of Carb Cleaner on hand. Remove air cleaner assembly and gently remove carb from engine, taking care not to damage the gasket. Working on a clean work bench is a must! This has to be a clean operation. Clean fingers too.
Remove float bowl. Invert carb and take care not to damage the float assembly. Check to make sure it's not obviously out of whack. Remove the float and needle valve parts and lay out neatly. Now, shoot carb cleaner (through the little red tube that comes taped to the can) into every orifice and passage you can find in the carb body. Use compressed air to follow up all the passages and to dry off carb of all cleaner. Use that compressed air in a can if you have no access to compressed shop air. Additionally check all of the passages for flakes of casting flash or machining chips from the manufacturing process. Carefully reassemble the carb after inspecting the needle valve tip for deformation or debris.
Fire that puppy up and cross your fingers.
I'm curious as to what you ultimately find! Good luck. It's usually something very simple and stupid.
