Big day in my DT2 life!! Some will remember my DT2 refresh and thanks for ALL the help, this has been THE essential forum to aid those like myself that know a little, but these old 2 strokes have been testing my patience. 
So, after I made the bike beautiful, I honed the bore, new piston, rings, and rebuilt carb along with new points, condensor and wiring. Set timing at 29mm btdc and it fired and ran good after 3 kicks....hadn't ran in probably 20 years. In the past year I've put almost 800 miles on it, but it never seemed to have the power I'd expect, and I'm basing that on experience with newer 2 strokes, nothing this old. I chalked it up to a slightly loose bore, 5 thou, and oem crappy exhaust. Couldn't get the thing past 60mph with factory gearing and it never was very snappy. Late last year it started to run a little crappy, slight miss, inspected the plug, good...replaced anyway and still ran crappy. Adjusted the timing, without opening the cylinder, just advancing a tad. Ran good for another 75 mi. and then again ran like poop. Adjusted the points again,and this time I went up and down and noticed it had to be EXACTLY in one spot, not a few thousands off in rotation, in order to run at all, but it did run fine, just not great power. Then 25 miles later, again. This is where I went crazy, inspected flywheel, noticed copper showing where point rubbed but nothing noticable with my finger, really tough to measure the "bump". Started to suspect crank runout issues so measured that and yes, crank runout was 5 thou or so. No noticable movement, but I assume oem bearings. Suspected the worst, and was almost was ready to rip it apart since I have a spare crank, flywheel and case in rough lookin condition bout probably clean up fine. Decided to clean the spare flywheel but it has corrosion and I so hated to use it on this clean bike. Ran 400 then 800 over the mag plates and magneto hub, cleaned and installed. Oh my, it ran, just the same. Adjusted the timing and shazam!! This thing hauls ass compared to before. Points are actually noticably opening, before you couldn't detect them opening and a few thou was all I got. That's why the timing was so stinking finicky!!! Anyway, I know the mag hub will probably wear the points contact out prematurely so searching for a better flywheel now. Not sure how I can be confident I'll get a good one, so unless something pops up on this board I probably won't take the gamble. Anyways,I searched and searched for possible answers on this issue, but I felt I had to figure out myself.

Good she goes well now. Timing on 250 is 3.2 not 2.9 so might be more horses hiding in there. Good luck.

Sure hope so, right now just happy I can get it past 70mph. The 2.9 was by memory, and I set it with a dial indicator last year during the resto.....since then, only by moving the points around till it ran descent.
Observing the flywheel, and noticing copper, I just assumed there was maybe 2 thou of meat missing if that due to not feeling a ridge and going by babbitt bearing readings.
I am surprised after searching every angle I could, I never found a discussion addressing this. That's another reason I dismissed the flywheel as the culprit.

Glad you've got the horses back! 

Could be that you're situation is so unusual that no-one had come across it before.