I just noticed that you are attempting to use a power jet carburetor. DO NOT USE THEM ON THE LT 500. The power jet feature on the TM 38 makes the carburetor next to impossible to accurately tune at partial throttle.
Adding another head or base gasket to lower the compression is the WRONG approach!!!!! The proper piston to head clearance and squish shape is essential in preventing detonation REGARDLESS of the compression ratio, exhaust, or other engine specifications.
Below is my response I made to Frank in a Private Message. Maybe others can benefit that have the same questions.
High performance 500cc single cylinder engine are most reliable when operated for brief periods of full throttle with a properly designed engine, with the correct exhaust system and a properly jetted carburetor.
Large two stroke cylinders do not scavenge properly at high RPM and partial throttle like when cruising down the Autobahn at 100 kph. As the state of tune of the ports and exhaust system progresses in the direction for higher power levels, the possibility of detonation occurring at partial throttle increases dramatically.
Carburetors can be jetted excessively rich for throttle positions below 1/2 throttle opening to minimize detonation occurring but increases fuel consumption, spark plug fouling and makes the engines run very rough when operating the engine in the RPM range and throttle position where the incomplete scavenging process and resulting detonation occurs.
I have had a lot of trouble with Paul Turner pipes and silencers burning pistons under wide open throttle operation. The inside diameter of the outlet pipe on the tail cone of the main pipe body is too small and the aluminum muffler's inside diameter is also too small if the engine has been ported to the level of 55 to 60 HP or more.
A Power Valve that is stuck in the open position can also contribute to burning pistons.
One of the symptoms of an exhaust system that has too small of an outlet is it will need to use a smaller main jets to prevent the engine from miss-firing at wide open throttle but will also increase piston crown temperatures to an unacceptable level.
Our HPR 19 pipe uses a larger outlet pipe and silencer inside diameter.
What year LT 500 is the TM 38 from?
If your TM 38 is from a 1987, there are modification that are required to make the carburetor work properly.
If you have a TM 38 from a 1988 to 1990 LT 500 I would use the following jets as a starting point if you are using the air box with the lid removed.
420 to 450 main jet
If the lid is installed: 350 to 450 main jet depending on the exhaust used
22.5 to 27.5 pilot jet
389 R2 to R8 needle jet
6DK3 clip in 3rd or 4th position from the top
air screw 1 to 1 1/2 turns
4.0 slide.
air correction jet removed
3.5float valve
If you have the air box removed with a large high flow air filter set up you may need to go as large as a 660 main jet when running our exhaust system.