That gap is common due to the way the head is manufactured.
The head is machined with a raised ring right at the edge of the cylinder that compresses the head gasket. This ring is what some folks sand off to raise the compression ratio.
As for not starting, check the basics.
Adequate fuel flow out of the fuel tank valve.
Did you install an in line fuel filter between the fuel valve and carburetor which is highly recommended? Is it clogged? The fuel tanks are well known for having rust and debris in them straight from the factory.
The carburetor, is it actually assembled correctly from the factory or did they leave the fuel jets loose and the float height adjusted incorrectly (both are common).
If you have no inline fuel filter then rust and debris could also be clogging up the fuel jets.
Air leaks. Have you read up on air leaks yet?
It looks like you have an NT carburetor. They can have air leaks where they clamp onto the manifold. Also the gasket between the manifold and cylinder is known for being made of a horrible wanna-be gasket material that is very brittle. Get rid of it and make yourself a good quality gasket out of good quality gasket paper.
The gasket surface of the manifold can also be curved or wavy which will not let any gasket seal no matter how high of a quality it is.
You already said you have spark, but check for it again.
Have you cut off the factory plug in connectors and soldered the wires together, insulating them with heat shrink tubing or electrical tape?
Have you tried disconnecting the kill switch?
In closing, have you read any of the the beginner's threads?
They cover alot of the issues that these engines are known to have.
Here's a good one to start with: