I think you're right.Even with stock carbs it should rev.It might not have the power it would with larger carbs,but it still should be rideable.Not really sure what the problem is with everything you checked.So it will rev in nuetral and not in gear?Could it be a vacuum problem?Maybe an airleak somewhere?Just something to think about. If so,that could end up burning up your motor.Jeff should have some ideas with what to check.