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Are you sure the coil is wired properly? They can run wired backwards, they're just a pain to start, idle ok, and dog out at higher rpm's. The half sized gap means either you've got weak fire or you're running some sort of charger (super/turbo) :). Regarding the needles, pulling them out...

Have you replaced the inline filter? It would be odd for a clogged filter to stall the engine then allow it to start right back up.