1..... My Volvo aq260 will not idle in neutral.
2.... When I start it I have to put it in gear for it to stay on.
3.... When I slowly move it towards neutral it stalls when it gets to about 1100 rpms.
Is this 100% AQ series Volvo Penta AQ260....... as in the AQ260 engine with the Volvo Penta stern drive, etc, etc????
I'm asking this question because what you are describing can be somewhat typical of an OMC or Merc ESA (electronic shift assist), SA (shift assist) or SI (shift interrupt) system malfunction.
The Volvo Penta Cone Clutch drive
does not require an ESA, SA or SI . You should see one shift cable only making a full run to the stern drive without interruption.
1..... If all AQ series, there should be no correlation between ignition system and shift cable resistance, position or travel.
2.... Do you mean for it to stay "running"?
3.... When going from Gear into Neutral, why the increase in RPM?
If you suspect the carburetor's low speed fuel metering, connect a vacuum gauge to the engine.
With a warm engine, now adjust the low speed screws as to achieve the highest vacuum reading at the prescribed idle RPM.
.