@RT325

I agree that compression is unlikely to account for the high RPM issue.  Probably more than one thing going on here.  In any case, might as well sort out the top end to check one more thing off the to do list.  If those numbers are correct they are definitely too low.  Best case is stuck rings.  Worst case is a worn out piston in a worn out bore.

Would be really sad if new bore and piston and compression reading doesn't change...  and wouldn't be the first time I've seen it happen. 

Cranking pressure readings vary a lot on so many factors from the gauge itself to the technique and ability to spin it fast enough. 

Yea, that's a restricted pipe!! I will check closer tomorrow. I have had the flywheel off before I pulled the head and jug. Key was intact and in place.

I just posted the following over on the DT400 poor mileage thread because what he described also sounds like what I was seeing when mine was running.

I have to say, that sounds like the problem I am having with my RT1 360. At about 5000 it starts stuttering and does not want to go higher. This is if I am holding a steady throttle. If I give more gas for a few seconds, it takes it nicely but as soon as I steady the throttle again in one spot, the stuttering starts again.

Mine was getting about 32 MPG, though.