I am not quite following your description. Do you mean the engine locks up, and then can be pullstarted after it cools?
Or do you mean the engine loses power AND compression, and thenspins freely when pulling the starter cord?
If it locks up, the piston will have transfered aluminum into the cylinder walls. That neans a cylinder cleanup and new piston, and perhaps some work on the tune.
If it loses compression, it could be exhaust valve seizing in the guide. Back in the 60s, we had a particular engine that was prone to seizing the exhaust valves in the guides when new. The problem (it was a car engine) was the later ignition timing required in the early days of emission controls. That particular fix required a custom valve guide reamer and about 4 hours of warranty work.
Late burn (or also long burn) can heat an exhaust valve enough to seize in the guide with subsequent loss of compression. Long burn often occurs when the tune is slightly lean, even if the timing is correct. The exhaust valve doesnt care....either condition will cause such a problem. I have seen poor quality valves (bad metalurgy) that experience valve stem bend (distortion) when overheated.
Any time a 4-stroke spits flame back out the carb, as the throttle is opened, you are observing the result of long, lean burn. There was still fire in the cylinder, after the exhaust stroke, at the moment the intake valve started opening to bring in the next round of fuel and air.
Remember, the burn speed drops WAY off once that exhaust valve is opened. Gasoline burns slow, yellow, and sooty when it is not compressed with air. That is why so many of us old line-mechanics occasionally burned off our eyebrows. We would look down the carb to see if the accelerator pump was working, while opening the throttle. The big yellow flash was followed by the smell of burnt hair. Nasty business, in those days.
Pretty hard to guess what you have. It could be something else entirely.
