You may have dirt in the idle jet or idle passage on #1. Clean the carb real good, take the jet out and blow the passages clean with air - from a small distance, don't pressurize the passage.
Double check your valve clearance on #1.
I haven't worked on the HPMX carbs yet, I try to stay away from them after reading lots of negative feedback on the early batches of the carbs. The later batches may have had some improvements incorporated into them.
You can also further improve them by using genuine Weber add-ons or upgrades, I can tell you more if you want.
Mixture screws generally should be out 1.5 turns, and you choose the idle jets so this is possible. It's just a rule of thumb to get you close. If you have to turn the mixture screws out much more than 1.5 turns, it is an indication of too small idle jets.
Bigger idle jets would help with the off-idle stumble and flat spot. Idle jets are in play up to 2500rpms, not just at idle. Then you start using main jets and idles together, until the rpms climb higher and the main jets take care of most of the mixture and percentage of idle jet flow gets real small. At the high rpm range, air correction jets come into play more and more, taking part of the role of the main jets.
if you do take the head off, you have an opportunity to do some measuring and learn more about the engine. I would fabricate pieces of metal pipe or a plate that allows you to clamp the cylinder down against teh case, imitating a cylinder head. Then you can accurately measure deck height, which would be VERY nice to know, letting you calculate the compression ratio. You would also need to measure the volume of the combustion chamber, cylinder bore and stroke. (Bore you can read from the top of the piston, should be stamped there).
Make your cylinder clamp downs in such a way that you can lay a metal straight edge across teh two adjacent cylinders, to check that the tops of the cylinders are exactly level with each other. One cannot be sitting higher than the other, or you will have sealing problems and head warping.
Before removing the head, go ahead and check the head nut torque on all 8. It's usually the lower 4 that get loose, being in consrtant oil bath more or less.
On reassembly, remember to replace the o-rings on the rocker studs before putting the rocker assembly back on. Use sealant under the washers on the lower 4 head studs. These are common places for oil leaks in the area you describe, looks like it's coming from between the cylinder and the head.
If the head to cylinder mating surface looks iffy, you can use valve grinding compound to lap the cylinders into the heads a little. Do it on both cylinders on one head so they remain even. No gasket, but you can use a very thin coat of some high temp sealant. I use Mahle cylinder sealant but people in the know recommend Yamabond or Hondabond too, from Yamaha or Honda motorcycle dealers. Aviation permatex has also been mentioned. RTV Silicone is not a good sealant here. I would only use it between the cylinder and the case, in place of the paper gasket. It has no other place in a VW engine because it's too thick for most purposes. (I don't use it at all)
Edited by Jan Andersson on 6/28/2010 at 11:24 PM EST