I had similar issues with my used and abused 150cc Baja Reaction I bought. Brought it home dead, got it running, smoked and had lacklustre power. I found cracks in the block, valve adjuster rods in the oil sump, a badly scuffed piston that was also seized on the wrist pin- and it ran like that for an hour!! After I rebuilt the whole engine it ran waaaay better. It's a 170cc now and way faster than what I started with.
You really need to get the engine up to snuff. If your going to buy a new jug buy the biggest kit you can. The larger displacement Big Bore Kits (BBK) require machining out the engine case/block to allow the cylinder sleeve to fit into the block. Your talking full on tear down and rebuild then.
There are smaller BBK's that do not require case boring, and those can be installed without totally dismantling the whole engine. You could install this option in a couple hours depending on your skill level.
IMO unless the motors not working decently it's not worth tuning the clutch or variator yet.
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