This unit is almost 10 years old......I am going to get it running one way or another and for less than $20, not counting labor. It helps me understand how to fix stuff quick on new machines.
I put another piston on it since the one on the unit had a little chunck out of the skirt. As expected that changed nothing. I did verify my carb is working by putting it on another machine. I did a compression test and it was 90. I tested another 261T with about same age and it tested 90 and starts and runs fine.
I guess I should bump this up to the stump the mechanic

I think I now know what the problem may be and I missed the biggest clue that is shown in those first pictures. Anybody have an idea?