Re: lacking power all of a sudden...here are the syptoms
Belt dust is weird, are your pulleys rusty, belts loose, or out of alignment? You might take off the belts and see how the accessories spin. And is the dust near the front of the engine? Do the belt vee grooves look abraded or glazed? There is rubber in the back of the engine in the coupler I believe too.
That spark plug should not have a closed down gap. But they are so cheap that you should just change 'em anyway. How about the cap & rotor? Any corrosion? Are your wires old? How about the ignition sensor that goes under the cap? Look at it closely, a contact to the electronic board can break but still be so close that it allows the engine to run-just won't rev way up in some cases. That sounds a little like your complaint.
Compression that's relatively equal is good, at least you don't have a bad hole.
The wire in the water hose is to assist with grounding the temp sensor, it's OK, leave it be.
Finish the ignition tune up, check the timing, check your belts and dunk it. Might be fine. I hope it is!
The pulleys look pretty good...i think the water pump one has a little abrasion but not much at all.
The dust is near the front of the engine by the belt itself.
The cap looks good and is on there tight.
Not sure about the rotor.
The thunderbolt coil looks good too, but had a little corrosion (white) where one of the wires connects. It would arch just fine if i disconnected the plug/wire that goes to the cap.
the wires look pretty good...they are a few seasons old, but the engine was not used much last season and was properly stored for a year.
And that wire was bunched up in the middle of the hose not touching anything but rubber on either side...so i removed it...guess i should put somethnig back in its place?
Ill have to inspect under the cap to see whats going on there.
Here is a picture of the engine when i bought it, midway through last season.
You can see that everything was kept very well and the wires look very new. I know just because it looks good doesnt mean much.