Alright thanks all... I'll accept that everything is right but the engine is too rich engage the clutch properly. I don't want to over rev the motor though. I'm not new to nitro but I'm new to these types of clutches. A standard 2 shoe clutch would definitely engage with the engine RPM I'm seeing.

Any suggestions on how to do the break in then? I guess I'm just going to continue running it like it is (1/4-1/2 throttle to get it rolling), then gradually start leaning out and hope the clutch engagement gets better.