By setting the flywheel with a stock key, you have the timing set ( fixed ) at whatever the flywheel manufacturer set it at, by virtue of where they set the magnet in relation to the key way cut in the flywheel. Stock fw's are usually 22 to 24 degrees btdc. ( before top dead center ) . After market fw's are usually 28 to 32 degrees btdc. ANY engine will run on any of those settings. Just make sure the key keeps the cut in the flywheel and the cut in the crank aligned and then torque it down. FWIW. Most feeler gages top out at .035", to set the gap at
.040" you place the .015" blade on top of the .025" blade and insert them together. I almost find it hard to believe you couldn't figure that one out. Then again ANY engine will run at .030" or .040". That's not your problem. From what you describe, it sounds like you are running out of gas.