Is it you can only reach 4000 rpm then it would be over propped which would lug the motor. If your just cruising at 4000 then this would not be an issue. I hardly ever go above 4000 and can go as high as 6000
Oh, I could go above 4000, but that's when it ran rough, so i usually cruised between 4000-4500. So to your point it could have simply had the wrong prop.
However, all that aside, the motor is toast, a rebuild quote at 4-5k on a motor that's worth 1.5k on a good day just doesn't appeal to me. Match that with the gas guzzling nature of an old 2 stroke and a carbed motor and I'm out, haha. Truthfully I'd been contemplating it before the piston ring blew.