OK. I will look into that. I did put a new seal on between carb and motor when I replaced the carb. Things did improve somewhat with some of these new parts. It used to not even start after stalling when hot. Now it keeps running until it hits a load, dies, but is easy to start.
Squirt some soap water around the carb to find the leak?
Is your float height set the correct amount? It may be a bit too low!
This sounds like a fuel problem. I had a similar problem with a 4 cycle engine. I replaced the carb with a new one, but the problem remained. I called the factory and their expert told me to drill the main jet with a certain letter drill. End of problem! Both carbs were made with the main jet too small.
Call LB and speak to a tech! Your surging sounds like it is too often to be a fuel problem. Usually a surging problem is not that rapid. Could it be something in the spark advance? I had a problem with the spark advance in a LB two stroke engine that caused the engine not to speed up to running speed after starting. It started easily but would not rev up to full speed. I found that the automatic spark advance was faulty. Replaced ignition module, $24.00, and all was well.