If the original color of the 98 engine was white that's the problematic engine, the 99 and up are silver-grey. Like I said in the beginning, I think your pop-off is a little high. The pulse (pulse is alternating pressure/vacuum) runs the fuel pumps, fuel pumps supply fuel to the carbs to go faster, going faster makes higher pulse (higher vacuum/ higher pressure) which allows more fuel to start the whole process at the next level of rpm, and if your pop-off is a little too high it stumbles along very slowly getting a few more rpm and in turn allowing a little more fuel till finally it takes off. I went through the same thing learning with a 94 650XP. Put on aftermarket flame arrestors and if I nailed it nothing would happen because the lower restriction arresters didn't allow the engine to get fuel, as the piston goes down on intake it pulls air, with less intake restriction it's easier for air to go by the arrestors than it is for that air to pull on the fuel pump diaphragm, but if I'd feather it, give a little throttle and back off a tiny bit and now I'm making more intake restriction with the throttle butterfly plates and the XP would take off quicker. I bet you put it on the hose and give it the smallest amount of throttle to raise rpm and it will rev since there's no load on the engine, therefore for the same throttle setting as in the water it will make a higher rpm out of the water with no load. I learned that when I gave it throttle and you feel it start to fall on it's face to quickly back off and then repeat with some throttle but backing off just when you think it's going to stumble and it would take off. And I had set the pop-off to what I was told is stock. My 785 XP with the big 46mm Buckshots will literally will launch when you stab the throttle and my pop-off is in the 12-13lb range. You tried everything else, just drop yor pop-off a couple lbs from where it was when you started. You never said what size N&S you used and what size was in it originally, Needle and seat size works together with spring size on pop-off, the N&S is what the pop-off spring tries to keep closed and fuel pressure (from the pulse operating fuel pump) is what tries to open the N&S. Sorry for the length, just trying to explain it from every angle. Remember, low pulse = low fuel pressure, low fuel pressure and less N&S opening, less opening = less rpm building, like a dog chasing it's tail, pop-off is set to gives just a little more fuel to go but low enough when throttle released the fuel shuts off preventing engine flooding. Jut try lower pop-off. Don't forget, what was and is the N&S size.... Lee
Of course I checked the squish. A little too much clearance but I believe the WSM pistons made up the difference. I was around 180PSI. I likes em' tight !! I rode today and the 1996 GTX only managed 6530 RPM Wide open (I never built the engine in this ski). The speedo said 45, the digital on the ski said 49mph. It was pretty choppy but that's all I have been seeing on that ski. I raced my wife from a 5mph roll on. I figured the 96 would win because it doesn't have the hesitation the 97 has. I never pulled her even a boat length and she walked on by me as our speed got up. I love tuning these things and I'm gonna love it more when I WIN !! LOL If it is true these skis run 55mph... I'm gonna get both of them there. 
