It sounds like the classic head gasket leaking on the side the carb doesn´t work, eventually it may squeak on compression-had the exact problem you describe, new gasket solved it. Carb screw is--I believe --about 1.75 turns out from all the way in, but it´s in the Clymer manual. This won´t make a difference if it´s the gasket, and this gasket is a common problem I hear.