My 263 with the stock AC glass bowl fuel filter only runs at about 1/2 full. That is normal. I have observed this on tractors, Wisconsin engines and generators. I can not explain why but they all work that way. Have you checked your vacuum? It should be around 16 or 17 inches. I am continually having trouble with cracked exhaust manifolds and leaking exhaust manifold gaskets. The old manifolds are just giving up. One time my 263 was acting like yours, would run like hell when you had your foot in it but ran terrible on the cruise throttle. I discovered that the wire going into the condenser was almost broken in two entering the condenser. I changed the condenser and that fixed the problem. I suppose that wrapping the exhaust would help eliminate some of the heat under the hood and might even make the passenger compartment cooler. Could not hurt anything that I can think of.
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