Saving Old Seagulls

Hi,
I purchased a 1967 40 featherweight 6 weeks ago. When I first started the engine it roared to life on the third pull and then ran just fine for 4-5 minutes after which it started to rev up and down and then quit. When I would try to restart it the engine would either run for a few seconds or just not start. After leaving it for 15-20 minutes, I would repeat the process and would start and run fine for 4-5 min and then quit. I decided to clean the carburetor including the main jet, checked both fuel filters which were clean, checked float and needle and proceeded to install new spark plug, new breaker points, installed new ignition wire and took the opportunity to install a new carb needle for 25:1 mix. A compression test gave me 120 psi. I use only fresh gas. After all this there was no change in the problem. I did notice a leak in the crankcase halves which I had not seen before. I decided to disassemble the engine. I found the bottom water passage plugged with sand and rust. The head gasket was in good shape. The cylinder had minor surface pitting. The bottom crankcase half had a slight deviation at the tiller handle support. I lapped the two halves to obtain a perfect seal. I installed new rings and cleaned the water passages. I installed a new back paper gasket and used gasket sealer there and at the head gasket. I did notice an up and down movement of the crankshaft of approximately 1/16 of an inch. The sideways movement appeared minimal.
After assembly, I retested the engine. It started up fine and ran perfectly for 4 minutes after which started revving up and down and quit. I decided to switch back to 10:1 mix and changed the carb needle back to the original. The engine did not improve quitting after 4-5 minutes. There has always been fuel in the carb and spark just after quitting. In one instance, I flooded the carburetor with fuel while the engine was trying to quit and quit anyway. I am not quite sure where to go from here and would welcome your input. When the engine starts to quit, it sounds exactly like it is running out of fuel but the carburetor is full. There seems to be a link between the engine warming up and it quitting.
Thank you,
Marcelo

is it pumping water properly as when they overheat they don't seize but stop and usually take a few minutes before they will start again.

my 40 plus that had a disconnected water delivery tube had running symptoms similiar to this
Is your water jacket clean? Are ou getting a nice pencil sized steam of water out of the water hole when it's running?

I see you are from New Orleans, any chance the motor has been under water for an extended period, [more than several hours during Katrina?] or more recently. If so I would suspect the coil.

Is the vent open on the fuel cap?

Thanks for all the suggestions.
I have checked everything that has been mentioned. The water passages are clear. My concern at this point is a crankcase leak through the bushings although I don't know if this is significant enough to stop the motor after it has warmed up.
Marcelo

Like Rob, my first thought was the air vent on the fuel cap. Try it with the cap removed, or at least really loose. Maybe the vent itself is plugged with gas-goo. I don't think an air leak is your problem, my best running 40+ pumps alot of oil past the bushings and weeps a bit at the tiller mount - and this at 25:1.

Todd

Checked vent cap. The passage is completely open.
Marcelo