Re: Problem with chain.
the chains will "bounce" around on all these engines. they're pretty jerky. it's just a matter of "how much."
if your sprocket is a little off center, but not too loose as to derail the chain, and not too tight like it's trying to pull the engine off, just go with it.
pretty much every bicycle chain has hi and low spots in them also. usually because of the force pedaling, it'll elongate the hole in the sprocket the crank sets in (on a one piece crank) or will tweak the actual sprockets with three piece cranksets. or if the sprocket isn't "true" side to side.
also, when installing the wheel, you need to find the tightest spot in the chain when tightening it down. if you don't, when the wheel rotates to that spot, it's gonna be way too tight.