Other inputs are valued.
I am sorry to hear about your problems, Stuart. Not fun to dig into a breakdown. However, it would be educational with pictures so if you can and like to share in our Yahoo group it would be nice.
Best would have been if you checked the oil level at the side of the road when it nipped up. If you had enough oil in the crankcase, there is something else that caused the nipping up and not because you installed a functioning flutter valve.
But, did you readjust the oil pump flow for the new condition with a flutter valve? Was the valve lash ok, or could it be that the exh. valve lash did close up and the valves evolved a leak? Did you check for intake nipple leaks at any time before?
An important indicator is the blue pipes. There can be several causes for the blue pipes, but it shows that the combustion is not finished until the exhaust valve opens and it'll flame in the exhaust tube. Or that the valves did leak.
A timing that is too late, late meaning too close or over top dead center, let unburnt gasses out that will burn in the pipes. The cause of late timing can have several reasons, not only wrong magneto cog index marking (don't trust them until you have checked those!), but also cross fire between the hot leads, irraticly grounded points, broken or weak points spring, faulty condenser or maybe the wrong points cam. Be ceratin you have a 42 deg. cam. (or timing ring in the case of Bosch) The first time the timing is checked it should be done on both cylinders.
A lean carb.mixture will give a weak mixture that is not able to burn at the rate it should, is missing power pulses or burns all the time until exh.valve is opening. Intake leaks can develop at any given time if not assembled with utmost care. A cylinder can even develop a crack at the intake nipple. A leaking intake manifold or nipple or perhaps obstructed gas flow in the carb or lines can be the cause it does not want to start again.
Wrong cam timing can also cause blue pipes. Check the valve opening timing for both cylinders against specifications before you trust the markings! Faults in the pinion shaft or pinion gear key slots, or a broken key, can alter the cam timing.
Blue pipes can indicate that the exh valves has been overheated, as well as overheated pistons, and I would check the valve seats for micro welding and regrind them and the valves if any signs of rough surface is showing.
Check the piston pin bushing(s) as well for overheating. They have a tendency to turn in the eye and block oiling.
The piston rings are most likely, or rather for sure, toasted when the cylinder has nipped for you. Rings are easily overheated and do loose tension in that case, so take a peek at the rear ones also. Check especially the piston ring ends, if they are showing signs of touching ("butting") the oil is scraped off the cylinder and the piston nips inevitably. That may be one, or THE reason your cylinder nipped up. Tension can be measured but you need specifications or a new one to compare with. And if they are stuck in the ring lands the engine has a hard time to amass enough compression to start easily.