This is a stumper. Kevron99, and with deference and respect to all the other posts, I wouldn't spend too much time messing with anymore electrical at this point. I cannot imagine any scenario where the mag, plug, or wires could keep the thing from ideling down. Kill it, yes, as was suggested, if the stress-movement of the clutch lever, cable, or actuator is causing a bare wire to move and short or disconnect...but not prevent idling.
I think you have two unrelated issues. Here are some ideas:
- motor kill on full clutch disengage: pull the clutch cover (plate with screws on right side, opposite of chain sprocket). look at the inside of the cover to see if there are any marks on the inside of it. Work the hand lever and see if it all seems to be working correctly. Go ahead and start it and see if it still dies with the cover off. I think maybe something is wrong, maybe in manufacture, causing the clutch plate or shaft to be pushed out past its design limit, and the clutch plate or shaft is jamming against the cover, or the shaft is too long...or the actuator cam on the other (left side, behind another cover) is in wrong, sloppy...or it is adjusted too far. I don't think you should have a fully disengaged clutch at only 50% of lever pull, it should be adjusted so it is just barely disengaged when the clutch lever is held down by the little 'locking' button...somethng ain't right.
-idle: I would reroute the fuel line to make a straight gravity flow to the carb too, but that is to prevent air locks or other issues. I trust you know if you have sealed and tightened the carb and intake. And a small air leak will keep it from ideling low and nice, but not keep it racing all the time. Fuel line looks like it is siphoning ok, and I can't see how it would keep it from idling if it is getting enough fuel to run at igh speed. My guess: On my initial build, I had the throttle cable too tight; you have to be careful up at the throttle handle end and at the carb. It looked fine all buttoned up on the outside, but the throtle was at least 50% open when the hand throttle was fully released. Take that throttle mechanism all apart, and reassemble it carefully to make sure the cable in the hand throttle is threaded right and throttle is rotating through its full arc with the cable on, same as it rotates without cable.
Hang in there! Take it from an old man, stuff like this can drive you crazy, but I can honestly say, after 40+ years of wrenching, when you finally figure it out, you will a) kick yourself for not seeing it sooner, and b) have a grin from ear to ear! I can tell you are frustrated, but you'll get it. It's just some metal and plastic parts and pieces, and you can outsmart it!