Thanks for the replies.
Checked the plugs, they look okay, but will consider replacing them.
I had that thought as well about removing carbon which may be sealing the old gaskets. Wondering if maybe worsened an existing base gasket leak. This motor has never been decarbed to my knowledge, and I’ve yet to get it to stop smoking after several seafoam treatments. I removed the lower cowling over the exhaust housing and wiped everything clean and didn’t see an obvious problem.
Another thought, I sprayed the powerhead with some Wd-40 to help keep mud wasp nests from sticking. Wondering if engine heat maybe burned that WD-40 off and that’s what was causing the soot on the external upper leg.
I ran it again for a bit the other day and no issues. Motor seems to run great. Starts right up. Idles good. I’ve really got it in good shape otherwise - new coils, wiring, powerpack, stator, timer base, carb rebuild, water pump. Bottom cylinder compression is lower than top and middle. Top 125, middle 125, bottom 105. Bottom cyl compression is what prompted the decarb. Bottom cylinder has been lower for at least 10 years. Blew a head gasket last year on the bottom cylinder and compression now is a little better than it was before the gasket blew. I had the head off a couple times, sort of glazed but no major scoring. Didn’t see broken rings or other damage with an endoscope. Bottom piston has just a touch more side to side play in the cylinder. Compression goes up with a little oil added through spark plug hole.