I had a similar problem with mine when I was tuning my carb. I run a 39mm PWK. I got it used and it's a sudco racing like yours, bug not air striker. It measures 39.75ish mm
I run a 160 main jet with my needle at the second notch down. 2-1/2 turns on the air screw with a 58 slow jet (I think) can't remember slow jet for sure.
Anyway, mine was leaning out like that and I found that I had set the float height incorrectly. It has to be set with the needle down, but the little spring loaded button NOT depressed! I had done everything you've done, bigger hose, I drilled out a fuel petcock (ruined it), heck I even tried a freaking flutter pump! Then it turned out my float height was wrong. When I made sure the needle valve was just seated, and button NOT depressed, that baby would rev 6th gear to the moon 70mph all the way! (at least that's how fast it felt)