3.5hp Tecumseh blows gas out the carb while running very poorly?

SOURCE: tecumseh 9hp craftsman snowblower will not stay running

First take the carb off of the engine and then remove the bowl, carefully take the float off paying special attention to the needle and how it is attached to the float. Next, lightly blow air into the fuel inlet while holding your finger over the spot where the needle goes in. Use a bread tie with the paper scraped off. Stick the wire through the pick up tube at the bottom of the carb. Find any other holes and probe those holes with the wire. Then thoroughly wash the entire carb with carb cleaner then blow the whole carb off. Then put the float and needle back in making sure that when putting the bowl back on that it seats tightly all the way around the rubber gasket. Also, just before you put the bowl on turn the carb upside down to see if the float is sitting level. If it is put the bowl on, If not then the spot where the needle sits on the float has to be bent one way or the other just a little until the float sits level. After the bowl is put in place, the nut that holds the bowl on the threaded area should have two possibly three holes plus the hole down the center, probe all holes with the wire. put everything back on the motor and try again. If it still won't run then you will need a carb kit.

SOURCE: oil blows out of tube

You either have a head gasket going bad or your piston rings are shot which causes air to go down into the crankcase building up pressure which exits through the breather tube.

SOURCE: Backfire Tecumseh Generator

To maybe convert your Flamethrower back to a generator, Make sure the fuel line is a good quality thick rubber material (like OEM )since it passes through the engine,HEAT is a issue, if it has been modified to steel, or it's thin rubber, it will overheat the fuel on its way to the carb and cause backfires after the engine warms up , ( vaporizing gas and pressure bypassing the jets flooding the engine) I use 1/4 inch Goodyear sold at Autozone , one of very few name brand quality parts you can get there. The other possible cause is carbon deposits built up on the leading edge of the valve not allowing the valve to close all the way, just clean the valve, it is caused by too lean or rich carb setting or clogged jets, if it is a newer style carb with a pink main jet then debris in this area will always cause backfire, check and make sure the old tiny O-ring on this jet is not still in the bottom of the shaft, people forget to pull them out all the time or give up trying to pull them out, I use a paper clip and bend the end 1/8 of a inch @ 90 degrees to fish hook it out of there, CLEAN THE SHAFT with carb cleaner and a Q-tip.... A Tecumseh engine will always backfire if the carb or airflow is not perfect and sealed tight !!!!!! it looks simple to rebuild the carb but you must take your time and look close, clean it very well, make sure the jet is SEATED properly and all tiny holes are clean, use guitar string not torch head cleaners as they will enlarge the holes and make your carb run rich.

SOURCE: 5hp b&s mtd chipper wont start

defiantly the carb but its not bad - clean / soak it with some seafoam and blow out all the holes. its just clogged and isnt getting the fuel/air mixture right.

SOURCE: tecumseh HM80 engine, new carb, won't run

Not the solid state ignition. If this were the problem the engine wouldn't start at all. There is some adjustment needed to the carb but without more info, I'm not sure what.