Outdoor Power Equipment and Small Engines - b&S vanguard backfires and has no power

I have simplicity lawn tractor with 16 hp bs vanguard V model 303777 type 012201 code 90030211. It allways back fired once or twice on shutdown. But just this week it backfired continuously on startup and when it ran. Also when the pto was engaged it had no power. I checked spark with automotive spark gap tool and spark appeared to be good over 20,000V. I also checked compresion and both cylinders were near each other and over 150 psi, if i remember corectly.

We took of air filter and front was black and oily. Local dealer parts guy said it sounded like the breather assembly so we replaced that. The old one leaked air when we tested it. But when we started it again still backfired and had now power.

we check plugs they were black so we cleaned them up and checked and readjusted the gap.

I would check the flywheel key to make sure it is not sheared and causing the ignition timing to be too far advanced.

If timing key checks out alright, then I would check valve lash.

I'd replace the plugs first. If still no better, I'd look into the valve adjustments and then the ignition.