1991 40HP Johnson won't rev past 2700RPM

My 1991 40HP Johnson on 20ft pontoon won't rev up past 2700RPM. It idles rough and is difficult to start cold.
At 2600RPM, holding the primer on will increase speed by 100 RPM. Sqeezing the tank bulb has no effect.
At 2700 it is pretty smooth but if I slowly trottle back, it is very rough sputtering and popping all the way to 1600RPM. Below this it fairly smooth. Tried different hose/bulb/tank combos with no difference.

History: last summer motor ran well except on going to full throttle it reved quickly to about 3500RPM but would take many many seconds to get to its final max of 4200. And would run smoothly. Psuhing in the primer would get it from 3500 to 4200 faster.

I suspected a fuel problem, so this winter I rebuilt the two carbs and replaced the VRO with a simple fuel pump mounted to the engine case vacuum hole. (Previously only used the VRO for gas . Used mixed gas). Now I have the above problem. I had a hell of of a time getting it started at first trying many combinations on idle speed needle settings but finally got it to run at roughtly the previous settings. It is rough and very odd is the fact that the needle valve setting on the lower carb does not make any difference. In fact, it will idle with that needle fully seated in closed. (which doesnt seem right to me)
Suspected the SLOW was engaging so disconnected the tan alarm wires right at the power pack...no difference . And the lead at the power pack is not grounded.

I suspect that I have a plugged jet in one of the carbs or a misadjusted or stuck float probably in the lower carb with the shut needle setting.
Before I start tearing things apart, and still have some hair, could someone help me out with this problem.

Were the high speed jets ( about 3/4" long ) removed from the carburetor bowls for cleaning?------Many folks overlook that simple step.----------These motors are a high revving machine and many suffered from broken piston rings, so do a compression check next.---------Flywheel key has been checked ?

High speed jets were removed during cleaning. Haven't checked compression nor flywheel key yet as motor ran OK prior to carb cleaning and new fuel pump (except for lag getting to full throttle)

Still suspect fuel issue. Is it not stange that position of lower idle speed screw has no effect or that motor idles with screw fully seated?
it is my understanding that this screw is used to adjust low speed not high speed. Correct?

Correct on that ---------------If there is poor compression , no spark on the bottom cylinder , broken reed valve on bottom cylinder then the motor will not respond to mixture adjustment.-------------Folks often pick on the carburetor as being the cause of motor problems, -Usually it is something else.----------Trouble shooting leads to a quick solution.-----------Your motor may in fact be running on one cylinder !

I will have to somehow check out all those possibilities. I'm a semi-novice at this and don't have all the right equipment. I'm on a lake in Quebec and the nearest mechanic is 45 minutes away...and no traillor for the pontoon. So I will have to make it a DIY project.
Will check spark first then try and borrow a compression tester. Will be back here in a few days with what I find.

Still think its too much of a coincidence that this problem arose after carbs rebuild and fuel pump replacement. Would you not agree its a very high probability the problem is carb(s) or pump?
Maybe I should try it with the VRO I took out.
Thanks for taking time to respond!

Trouble shooting is the way to come up with the facts on what is wrong with the motor.

Racerone and others:
I finally got time to relook at engine. Did compression test. Results: 140 -150psi on top cylinder, absolutely 0 psi on bottom one. Not even a flutter of the guage's needle!

So is this a piston with a hole, a blown head gasket, or broken/bad reed or exhaust valve or something else?
Is my next step to take off the cylinder head and check around? Or is there something else I should try before this. I am now definitely in new territory for my expertise level. Any advice would be greatly appreciated.
Dam..how did this happen over winter storage??????

Reed valves have little or no effect on the cylinder compression.----In fact when compression is occuring in the cylinder the reed valves " open " to let fresh fuel and air into the crankcase.----------The next step is to remove the cylinder head ( 10 bolts) and report what you see.-----------Remove the 2 side covers as well as the motor likely will need to come apart.

a
Racerone:

Took head off and these are pics of top and bottom cylinders.
Bad one is the bottom cylinder. Sleeve is scored. Top sleeve is smooth.
Gasket looked intact.
Comments??

I always recommend a compression test when a motor is not running correctly and now you can see why.--I can not count how many times I have seen that on these 2 cylinder motors.--------Pretty common fault -----------------The motor will have to come apart for inspection and repair,------Hopefully the crank and rod are still usable.------If you decide to rebuild , make sure you get the correct prop on it.------Running with the wrong prop can cause such damage.---I have boxes full of spare parts for those , but I am at least 8 hrs away.

My idea now is to not repair the engine and pick up a relatively new used pontoon and motor.
Repair would be costly and logistics of getting boat to a repair shop and back before end of summer would be stressful. And I have no resources to do any of that. Motor is 21 years old . Think a 4 stroke would be a nice replacement! And then there is the wife factor!!

Now what do I do with it? Is there a market for a 1991 boat and inoperative motor? Where and who?

If I may ask, how does one assess a used motor (on a pontoon)? Have my eye on a 2006 20ft Bentley with a 50HP Mercury 4 stroke. Its in the water nearby.
One thing I will definitely do, thanks to your input, is do a compression test first! What else can you recommend? I know the person who has shrink-wrapped and winterized this boat for the owner so I have a bit of history. And he knows the owner quite well.

Thanks again for all your help!!