lawn-boy biker: thanks you for your help. Two keys sheared before I realized with your help that it was missing the bellville washer. I found a bellville washer in the HS40 parts box and installed and that seems fine now, I'm still having a carb problem.
Carb issues
After realizing that fumes that we killing trying to keep it running with the main at 1 1/2 turns was just too much partially burnt fuel I decided to go only 1 turn and resolved some running problem, I still must fine tune it but hope to get it it right on tonight.
cncsparky: I'm trying 1 1/4 on the low idle to tonight, I'm new to this so it is complete trial and error. I hope I can eliminate that puff of smoke when I wack the throttle I think it carburation as opposed to oil. I'm not sure but the smoke must be still to rich what do you think?
When I got this mini it didn't have a recoil some one removed it and also set point at thirty, so I changed that back to .020, The compression seems fine, if your not paying attention when pulling the starter it will compression lock from time to time and rip the handle through your finger even with a good key in place. It came with an Tecumseh adjustable diaphram still carb, so I think the motor is an off the shelf replacement for the original. It also doesn't have 45 degree angled intake. I think it probably worked fine with the diaphram carb and the 90 degree intake. I may end up re-installing the carb it came with for this reason until I get another the proper intake.