Well it's a cub without an override so it won't be perfect by any means. Make sure the shift shaft is adjusted properly where it contacts the shirt star. Other than that it's pretty much worn out parts that make them shift bad, other than the large amount of power they make.
I'm not too sure on tuning the needle. I never had problems with mine so I hadn't ever messed with it. We can check it out this weekend though, the LSPS store has plenty of jets to get you setup.
You should be running B8ES spark plugs with gas. Could possibly be some of your problem there. I think those are a colder plug, not really sure what it would affect though but definitely try the other plug 1st. Who told you to run those?
You gonna change your gearing up any for the Shearers? I noticed quite a bit of lost low-end with the shearers and my HJR dune port. Now don't get me wrong it ran awesome just had to keep it wound up pretty good, which I don't mind.
.012 is usually one of the more common thicknesses ran. As for the cubs and "cut" domes, if you have a true 4mm cub cylinder they don't require a cut dome. The cylinder is made taller from the factory so it is not needed. Where did you get the dome from that you are wanting to run? I believe a fair squish is anywhere from .040 to .050, you can maybe go a little lower than that but I don't like to risk it.