Hi ProXu1Victa
Do you have a welder? I suggest making the custom exhaust before trying to run the engine again. Maybe even try using some water pipe. Running the engine without the muffler for extended periods is a bad idea. There won't be enough back pressure to stop the flames from burning up the valves. Did you see flames coming out of the exhaust port?
The valves, especially the exhaust valve, may have lost its ability to seal off the exhaust port during intake, compression and combustion. This means that most of the fuel/air mixture may be lost during these strokes, leading to poor power and starting. You may need to take off the cylinder head and check the valves to see if the valve faces are still seating well against their respective seats and the valves have not disintegrated. I am not completely sure but, I believe the valve heads have been heat treated more than the stems. If the valve head is heated from exhaust flames, then that will soften the valve material and make it prone to wear a lot lot sooner.
Also, if there is smoke in the crankcase (called blow-by), then your rings are shot, or the cylinder walls are scratched to buggery. However, some smoke coming out of the carby may be due to the intake valve not closing properly during the exhaust stroke. Either way you will need to take off the cylinder head to take a closer look. All that may be needed is a good clean (to remove carbon deposits), some valve lapping and adjusting the valve clearances (according to Honda'sspecs) - best case scenario. Not sure how handy you are or if you have the nessesary tools or time to complete such a task. So, good luck!
Regards,
xhall
