Tough to tell given how it came off but that was the area that looked the worst.
While the head was off, I held it upside down and put some gas into it to see if it held. I saw a video online showing that this may a good way to see if the valves are leaking and since I was losing air out of the intake, sure enough, the fuel leaked out down past the valve into the intake. So I lapped the valves and it's doing much better but still leaking just a tiny bit. So I'll do it again tomorrow. Could this have been the problem? I was thinking about it while walking the dogs and given my need to understand exactly why with everything...I came to this conclusion (probably wrong as usual but here goes).
This machine has a 6" long plastic intake pipe between the carb and the head so during cranking, it takes a few revolutions of the cycle for a usable mixture to make it to the cylinder. But during the compression stroke, I'm getting air moving back out toward the carb. So I'm ending up with a combustible mixture sloshing back and forth too far from the head and never quite making it to the combustion chamber because of the air escaping out the intake valve. When I spray carb cleaner in there, it's enough to get things started, and once going, there's enough flow for it to run well. The times when it did start, I just got lucky in that when the engine last stopped, it happened to be at a point in the cycle that allowed enough mixture to make it there before it started getting blown back out.
Am I close?