Re: Still wont start - what's next?
Leaf plates looks 'rusty' and I would say questionable. Rusty plates gets brittle and may crack if/when you get it going.
For the crank case halves only use a sealant called Gel Seal II. Extremely important that the surface is 100% clean and all remains of old Gel Seal is removed.
For all other gaskets except gaskets on leaf plate and intake/carb, use BPR Sealing Compound or Loctite Aviation. Use Sealing Compound on all screws like head screws, exhaust cover screws, engine-leg screws, gearcase-leg, water pump etc.
Get a min 1/2" thick glass plate, glue on an 800 grit wet paper and use it to clean and plane out head, cyl-head surface, cyl-leg, but NOT crank case halves!!! Use WD 40 or kerosine as wet medium, not water.