Tony, the 2nd smartcarb came with too lean of a needle for that engine setup due to an error by Tom not recording information about this engine being heavily modified from stock, right? It normally would have come with a richer needle if he had recorded the correct information, right?
OK let's do a little review so we can all understand what is happening here and avoid any more costly mistakes. Tony was given a loaner carb to try, after installing it had a sticky float issue. He started calling our tech service line, where he was advised how to handle the float issue and some basic tuning tips. From there a persistent mid range stumble showed up and we started chasing things around to determine the cause. My guess is our service technician was guiding him through proper float bowl settings thinking we had a capacity or fill rate issue. None of that worked so we likely went on to metering rod selection and started stepping up richer. All this by the way working with a non alpha customer using a borrowed SC and supplying parts to help Tony get his modified engine dialed. We love you guys. Anyway it was finally discovered that the carburetor was indeed hard rubbing (inside the intake boot) and likely the issue all along. Some pictures were posted and the plug showed a nice light tan and apparently at or near a perfect burn which we are all used to seeing with an SC. The piston on the other hand is not happy at all and shows localized over-heating, yielding of the exhaust edge and chunking off.
It's clear the carb touching the intake caused the fuel to turn to a highly aerated froth along some frequency (mid range) causing the carburetor to deliver pre-aerated mixture to the engine at those points and burned the piston. Alright, in the meantime another carburetor is ordered but nothing I have is specifying this is going onto this same engine we spent a couple months trying to dial in and had a reasonable expectation of what metering rod it should come with. This is clearly our fault for not requesting enough information. Notwithstanding on the other end, had I the earlier carburetor and several metering rod variants in my hand, a brand new bored, ported custom engine needing broken in and several months of plug readings. Intuition would have led me to the richest rod I had already been running. I am reasonably certain from looking at your plug the .074 MR is very close to what you will need with this engine. The .080 MR, which is our standard issue for 300 class stock to lightly modified dirt bikes will not work and your piston has brought that to your attention. When we receive your original carb back we can validate these things and make sure we are correct. The new 40 SC you have will require the richer rod for best performance and to protect your engine. Sand of course is the hardest loads there are and any engine will want more fuel under these conditions.