Well I can get it to start. Only with starting fluid and holding it to WOT. It will clear up and finally start running right. I was able to get it to idle for about 5-10 mins on it's own. I stepped away again and it suddenly chugged a few times then cut off. Repeated the process again, got it started again. If I let it clear up and slowly back it down to 1000rpm or above it will run for a while. Then shut down after chugging a few times. If I restart it again, let it clear up, and keep it above 1500rpm I can rev it to around 2400 and back and forth no problem. If I hold it to WOT and try to get it to governed max RPM, it stalls out, starts popping then dies.
Sometimes playing around with it trying to get it cleared up, it will "kick" in and stop smoking. It clears up and runs well. Almost like it was flooding, then cleared up. Also noting EGT's everything is fine when running.
So IMO, the quill shaft is fine. The timing is correct as well. The lift pump provides 5-7psi at ON, not running. When I get the engine running and lower RPM down to 1K rpm, fuel pressure at the bleed port is 35psi. Revving high, 60+ psi. Also I pulled the plug on the HH and checked that the plunger moves freely and consistently while turning.
I pulled the check valve on the front of the HH, didn't see any gunk. Wasn't stuck either. Reinstalled it. Also did the same to the check valve on the secondary filter housing.
Also I noticed now when I was checking the return lines, I'm not pouring fuel out there now either. So perhaps the check valve was an issue earlier.
I did play around with the cut off valve with the cover off. I did notice there's a little play of the shaft in and out against the U shaped cover (with the two safety wired screws).
I'm wondering if Eric is right and I killed the HH due to the starvation. Perhaps the starvation allowed the plunger to wear (I know these are a very close fit) enough to not produce enough pressure for start up.
At this point, I believe the issue is certainly in the IP. As when I do get it to run, and run "right", the engine seems fine. I believe the lift pump is certainly ok since I see 5-7psi. I think the booster pump is ok as well, as I see 30psi at idle and 65-70psi at high RPM. I believe the check valves are ok as well, as I'm no longer seeing fuel trickling back through the nylon tubing on the injector returns. I have not checked the check valve on the booster pump. I need to study the TM's more to figure out exactly where that's at (I want to say it's mounted on the bottom of the pump). Perhaps this check valve is hung open. I could see it possibly causing the booster pump (since only 5-7psi is feeding in) to not allow the start as well. Only when I start it with fluid does it actually get enough RPM to allow the check return to cycle through the booster pump and create enough pressure to run.
Wait, now I'm thinking back to testing the HH plunger. I pulled the power to the lift pump to prevent it being a mess. Shouldn't there have still been fuel pumping through via the booster pump?
Sorry for the wall of text. I'm trying to talk my way through everything I've done.