High compression is the issue. I remember helping a friend rebuild some 250cc ATV (can't remamber the brand) and that thing would never idle. It would run like a SCALDED APE but you would have to keep it running by keeping the idle high. Idling, high compression, and single piston engines do not get along very well. You may have to adjust the idle up a bit so the crank has enough inertia to push the piston up through it's compression stroke. This is where the engine typically dies at idle.
As far as the running for a few seconds, then dieing issue, lack of fuel may be to blame. If you're getting fire, I doubt that's the issue. Not sure if you have to rejet. My guess would be no because the size of the motor hasn't changed, just the compression (actually, the size of the motor has changed....it got SMALLER due to the dometop piston).