Is My Tec Sick?

#1
Well, I got my AC Climber running today. It has the original HS40 4hp Tec. It was smoking pretty bad, has a pretty loud knock that gets louder when you let off the gas and will only run with the choke on. I haven't done anything to the carb except adjust the mixture screws. I did change the oil and checked for loose nuts and bolts.

I used to build motorcycle and car engines, but I haven't messed with these little guys in about 35 years since my Taco 99 and buddies Bonanza.

Any ideas?
 
#3
The smoke is definitely gray, and because I need the choke on it's not likely running rich. I think I have decided to go with a Subaru/Robin 7hp that has an alternator. I'll rebuild the HS40 at some point so I have the original engine for it.
 
#4
Knockings never a good sign, No loose rod bolts? bad lifters, valves? Could be piston slap I guess,

If the smokes grey id imagine its burning oil, hows the compression?

Im sure it just needs to be torn down, cleaned up, a few new parts and fired back up,

It might be cheaper to rebuild then buy and entire new engine,
 
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