Yes I am pushing the key in when I start it and I usually open up the throttle full blast . Is that too much?
Severely too much. Proper cold starting is to have the the warm up lever in the start position (flat to 1/4 way up), turn key to start position, push in the key to engage the proper solenoid, then crank the engine. By 'opening the throttle full blast' you are leaning out the the fuel mixture and a cold engine needs a rich mixture to run! For cold starting you basically want the throttle plates completely closed which is why you need little to no rise on the warm up lever.
A poor condition motor on muffs will fire using ether so that is not a good test of the motor.
NEVER start a 2-stoke engine on ether.....bad, bad mojo. You're basically making the engine run with no active lubrication on the bearings. The better thing is to have a squirt bottle with 50:1 pre-mix, shoot a little of that into the carb throats, then try to start with the above procedure.
Water in fuel is really bad but it sounds like you've covered that issue.
Here are things to check:
1) Make sure the throttle plate linkages are all sync'd. If all 4 are not closed/opening simultaneously you will have unbalanced fuel-air delivery and it can cause issues like this.
2) Verify your primer solenoid is working. Attach a volt meter to the leads connecting to the solenoid then push in your ignition key. Are you getting 12V to the solenoid? If yes, remove the fuel outlet hose from the solenoid, squeeze your primer bulb until firm, attach a hose to your solenoid outlet and point into a jar, then push in the key. Does fuel squirt into the bottle? If no then your primer solenoid is probably bad. If fuel does squirt out your problem is something else. If you do not have 12V to the primer solenoid check for a bad fuse or a short in the ignition harness.
3) Verify your battery is healthy. Slow cranking speeds will result in poor or no spark when starting.
4) Verify compression and spark all meet specs. Check compression with a gauge, around 100PSI and even on all 4 is what you need. Use an open air spark tester to ensure all 4 plug leads will jump a 7/16" gap. Correct spark plugs are Champion QL77JC4 gapped at 0.040". Do not use any substitutes. When it comes to 2-stroke engines, the OEM plug is always the best. Cross referenced brand X, dual tip.....etc, etc never perform as well as OEM.
KJ