OK as I am new here and really do not know this engine on an intimate basis I will suggest that you take my suggestions with a grain of salt.
First off this does sound like a lean mix problem to me or maybe a clogged exhaust. I assume it is a float type carb. The best place to diagnose this quickly is at the spark plug. If it is carbonized and black it denotes a rich burn, if it is whiteish grey it denotes a lean burn. Sometimes this can be the tell all in engine diagnosis.
I would suggest to first remove the carb and drain it of fuel as well as the tank. Make sure that there are no obstructions between the tank and the carb and that it is free of leaks between the tank and carburator.
Then remove the carburator from the engine and separate the carb bowl from the carburetor body.
Make sure that the float travels freely in an up and down manner.
Next remove the float retainer pin and the float and metering valve clean and inspect it for wear around the seat point (if worn replace).
Then use an alcohol swab to clean the needle seat and blow compressed air through the fuel inlet to make sure it is free of obstructions.
Re install the float and needle metering valve and place a piece of fuel line on the fuel inlet and invert the carb, Apply a small amount of pressure to the line by blowing into it and ascertain that the float is holding pressure in a horizontal position when closed and that it opens and fully seats when moved upwards and fully seats with slight pressure on the float when closed.
Next remove the fuel adjustment screw and blow compressed air through the mixture jet to insure there are no obstructions.
Remove the main jet and clean.
Reassemble the carb and make sure the bowl gasket is properly seated and then proceed to reinstall the carburetor to the engine making sure that the gaskets seal to the piston jug and there are no leaks.
Next step to diagnose is a big problem many people overlook. That is a muffler that has a spark arrestor or muffler that is clogged. If the Spark arrestor (which is usually a screen) is clogged it can be cleaned by heating it with a torch and scrubbing it with a wire brush. If you can disassemble the muffler do so and look for carbon obstructions and remove them.
While you have the exhaust off check the port for carbon build up and remove as necessary. This is also a good time to inspect the piston and ring. The exhaust side of the piston is the one that usually is one of the best diagnostic points of an engine and its history. While the intake can have some minor scratching from dirty air cleaners allowing crap into the engine they are usually clean and look shiny new because the have cool air and fuel coming in on that side. The exhaust side if well maintained might have a slight brownish enameling layer around the top and extending mid way down the cylinder but that is normal because of the hot exhaust gasses. You can position the piston and take a small screwdriver and push in slightly on the ring to tell if it has excessive carbon under it that may damage the engine and also check its up and down movement in the ring grove. This needs to be done with care to make sure not to damage the piston itself. If there is any evidence of a stuck ring or other deep scratches on the exhaust side it is time for more extensive maintenance and or parts replacement.
Once you have all of these steps gone through and if the engine is still not running properly and you know it is not a spark problem then chances are you probably have a crankcase or cylinder leak causing the motor to run lean. In that case see this post as I just had to go through these steps myself to find the leaks in my brand new engine:
http://motorbicycling.com/f52/basics-port-polish-port-matching-16646-6.html#post237700
As I am not sitting at an engine and typing off the cuff so to speak as I said take these words with a grain of salt and listen to any other replies.
Good luck man.
