Olly,
On the wrap around motor that we run, we have not had any issues with the stock carb drawing fuel. Our carb has the low end needle cut out of it as well and we run standard medium size dubro fuel line. Check the seal bores between the bearings. Does the exposed bearing on the rotor have a seal on it?
Andy might be on to something as well. I had this problem on my scale a while back where it would quit running after 5 or 6 laps. I ended up fixing the fuel draw problem by reducing the stinger size on the pipe.
Ok, if the DD engine is having the problem and the wrap around engine did not, then the other problem could be the PTO seal. Some of you guys know that Rod G. was adamant about the importance of the PTO seal on OB engines. Maybe Nova did not pay close attention to that detail.
Even so, a bigger spraybar bore, (about .100") for better fuel delivery and a bigger stinger diameter (about .420") to let the heat out would cure the problem, even with a poor PTO seal. That combination will let the engine idle cleanly on the beach with less than half throttle and the engine will get the fuel it needs under a load.