[sc00ter]

The rear wheel should spin freely, like any scooter out there, when in the OFF position or while at idle. Even if the engine grenades, it (rear wheel) should still spin freely. You said the wheel spins freely after pulling the reduction box cover off, and the ATF fluid looked metal free, what does it do when you put the cover back on? Side note: Someone said not to use ATF fluid, I agree. Use whats recommended in the owners or service manual. We use 10-30 fully synthetic motor oil.

I still think its a lean seize. You want to look at the side of the piston thru the exhaust port. Spark plug color should also be an indicator. Is it the lovely mocha color? Brite death white? You could also do a compression test. You can "rent" them for free at most major auto parts store. I dont have a service manual handy with the compression specs. If you do a compression test, do multiple (3 or 4) completely from start to finish. Sometimes those things dont always seal 100%, so do multiple test and average the numbers.

One last wild card. There is a chance that running it with an exhaust leak caused a reed pedal to crack/chip. The stock metal reeds hate expansion chamber style exhaust also. The metal reeds will destroy the piston when they fail, and if the damage goes past the piston skirt, your main bearings will be shot as well.

If Zumaforums was still active, you could have found someone 2-stroke savvy in your area easy. Its a FB page now from what I recall. Be warned if you go there! Stupid questions will get stupid answers! Its a trial by fire but as a whole they will eventually reach out and help.

But in a nutshell:
The rear wheel should turn freely when OFF or idling. It should NOT be tight or turn with the motor when OFF or idling.
IF it does, the clutch is hanging up or the variator is not seating correct.
IF the rear wheel is dragging, I bet $5 the reduction gear is not spaced correct. It will bind and drag, sometimes worse when hot.
IF you had a lean seize, there is a chance it might run for awhile again.
BUT STILL find the base/factory settings and set the carb BACK to stock!
IF some old man tells you your scooter is running rich, rev it a couple of times and choke him out with the sweet smell of 2-stroke! Then ride off into the sunset, leaving a cloud of bug killer behind you!
LOOK again at the side of the piston thru the exhaust hole.
LOOK at the plug color and for trash in the plug gap.
LOOK thru the piston hole and see if there is a hole in the top of your piston. A compression test will reveal this as well.

Thats the extent of my powers from across the country. I wish I was closer, but there is SOMEONE in your area, you just have to find them. I've met some interesting people thru scooters and bicycles. I help 3 people with cheap transportation needs. 2 scooters that are their only transportation and one guy with just a bicycle. Got so tired of working on old, worn out bicycles I gave him my Fairdale Taj 26". $500 to me is like $5000 to him. He pays it forward as much as he can.

Again, let us know your findings. And fingers crossed/thumbs pressed (German saying) that its something simple!