Check the exhaust for debris blocking
The timinmg is preset by the permanent keyed slot built into the inside of the flywheel where it mates with the crankshaft. If the key was broken off, you would get No spark because of the nature of the magneto ignition. Your compression is actually pretty low for a 2 stroke. It should run higher like around 90+. Try this. With plug removed, cover plug hole with thumb and give the pull start a real strong pull. It should push your thumb off of the hole. If it doesn't the compression is too low for the engine to run. Scored piston walls, or cylinder walls could be the problem. Again 60PSI is really low. I would remove the jug and check for piston scoring and cylinder scoring. The engine can be easily rebuilt (but not real cost effective).
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