Mercury 110 9.8hp no top end performance

[Andy W]

Well I finally got me a SIB and all is very good apart from a slight issue with the engine. I'm new to the world of outboards but have worked on numerous petrol and diesel automotive and motorcycle engines. I have just bought a Lomac 350 which came with a very tidy Mercury 9.8 hp 110 2 stroke circa 1979. Both the boat and the engine have done very little and been lovingly looked after. The engine starts lovely, runes quietly, shifts smoothly... On testing it on the river yesterday I found that ... It accelerates nicely up to about 3/4 throttle this takes us just on the edge of being on the plane. If I twist the throttle a little more the engine dies, power drops off.
Because of the engines age I immediately suspected ignition, thinking it would have points... but not so, it has capacitor discharge ignition... We used what I think is a lot of fuel for a short jaunt, so I wonder if we have an combustion air restriction. On looking for an air filter I find there isn't one...just a grill over the carb air inlet which is open to the the inside of the engine cover. To my surprise I can see no way for air to enter the engine cover unimpeded.... The sound deadening foam inside the engine cover is degrading and falling apart and I can't help wondering if a bit of this has been sucked into the carb or something, or possibly obstructing the air inlet to the cowl somewhere... I will start from first principles with some new plugs, a carb clean, check the timing etc... but wondered if you highly experienced types had come across this before?
Also I am not sure how I can test if I have cured the problem without taking it down to the river again.... can I run it full chat in gear dangling in a barrel? I suspect it will empty it all over the yard in about two seconds....

Regards

@ndy