External Reeds Merc Mystery

[Fastjeff57]

Reference: Merc 350 twin, 30 cube, with twin external carbs.

I’m ready to drag this damn thing outside and set fire to it! Everything I've tried to date has seemed to make it run even worse. It starts reluctantly (and with LOTS of choke), idles poorly, and is hard restarting after it blubbers out.

The reed valve assemblies seal perfectly—and I’ve messed with them several times now--yet a visible cloud of gas droplets blows out of both carbs. And we’re talking enough gas to wet your fingers!
Ironically, it runs like a bear when I crack the throttle. Took it to the pond yesterday for a trailer test. Motor had excellent power and took the gas instantly (though it was running way too lean). It has good compression, excellent spark, and lots of new parts.

I'm truly baffled! How can gas blow out the carbs like that with tight fitting reeds? Obviously THAT is what's causing the lousy starting and crappy idle, but what is causing that? It's possible that the reeds are too close to the flywheel and the shock wave generated by the crank whizzing by the reeds is popping them open? (I'm gonna add a 1/4 inch spacer tomorrow and see if that helps.)
Anyone know what’s going on here!
Thanks in advance for any help.
Jeff