Thanks AVB, I think you've moved us further forward. I too only saw the manual choke and the primer system in the IPL, but I saw this in the service manual:
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I agree of course that the manual primer system is somewhat prone to not working and needing an overhaul. I also agree that with enough ignition retard, the mixture can still be burning when the exhaust valve opens, which is a form of backfire. I've also found though, that many members say "backfire" when they mean "spit", which is usually lean mixture, though it could be incorrect valve timing or severely advanced ignition timing. To advance the ignition that far, I think the key would have to be completely sheared and have caught on some part of the flywheel so the flywheel was still being driven. Unless you know the person or can put your hands on the machine and look at it, the quickest route to the solution is probably to list the possible causes rather than pick a favourite guess at the beginning.