Does anyone know if these have compression release????
If the Spec # of your K161 has a suffix of "H" or lower, the engine did not have Automatic Compression Release (ACR) originally. .....If the cam was replaced at a later date, all bets are off. ....All K161's with a spec # ending in a letter higher than "H" were equipped with ACR.
The ACR consisted of a flyweight-activated pin on the exhaust lobe of the camshaft. ....At cranking speed, the pin would lift the tappet slightly to lift the exhaust valve slightly off its seat. .....Once sufficient rpm was reached, the flyweight would retract the pin, and the tappet would ride on the cam lobe.
The exhaust valve tappet was different for an ACR vs. non-ACR engine.
Whether or not the ACR is on your K-161, there is an ignition advance mechanism attached to the end of the camshaft. ....This too is activated by a different flyweight attached to the cam. ....It is possible this mechanism is not working properly, and is throwing the ignition out of time.
I also like Doug T's idea of a possible clogged muffler. ....This could be easily tested by blowing some compressed air in the sparkplug hole, while the exhaust valve is open. .....You could also try holding your hand over the muffler outlet while cranking the engine to see if you can feel air movement.