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Check the alignment of the pick up coil to the flywheel tangs. If they are out of alignment it won't rev higher than about 6000 rpm. By alignment I mean along the crank axis - in towards the engine, or out towards the flywheel. It's useful to mark the pickup and tangs with tippex so you can see if ...
theres a few mates of mine that use the variatronic on tuned ts1 gt200 and other fast road scoots with ignition @ 23-24; using 23 degrees it will retard to 15 degrees or less at revs
you cant strobe a variatronic to high revs the strobe will max 2 sparks every 360 instead of 1; id strobe it at 2000 and set it 23-24 it be around 16 degrees on power
if it was mine I would do one thing at a time richen the needle jet 266 or 268 first then try advancing the ignition; I would set the ignition at 2000rpm around 23-24 degrees
the pin that the lever pivots on can corrode and stick which stops it from working smoothly makes it stick; take the two little circlips off remove the pin clean it up use copper slip on the pin and pivot and it might work