Remove the muffler and have a look at the piston skirt, it may be scored.

Funny, the Lawn-Boy drawing shows an adjustment collar on that 'F' engine. While you have the muffler off, check the muffler for carbon build-up and the exhaust ports for carbon blockage.

"Funny, the Lawn-Boy drawing shows an adjustment collar on that 'F' engine."...I did look at the drawing and then I looked at the engine and you are correct, it does have an adjustment collar. It's metal and I was looking for plastic. It's really buried and I tried to get it to turn, but could only get a couple of clicks out of it. I'll remove the engine shroud so as to get better access and free it up. Would an adjustment there fix my problem and if so should it go CW or CCW? I don't think the exhast ports are pluggged.

Just to add sometimes after it has warmed up and appears ready to stall I can keep the engine running for a while longer by choking it.

Yes please check the stuff known to cause start and run problems in two strokes. Is the fuel fresh for this season. Carbon residue builds up and must be removed so at least clean the port. The two strokes is harder on the plug so it should be cleaned and gapped or replaced.

First, thanks for the responses. Fresh fuel, new plug and no carbon in exhaust ports. Gave it a healthy dose of seafoam last night for an overnite soak. Added more fuel this morning and it seems to be running fairly well now. I'd still like some input on exactly what that adjustment collar wheel does. I was under the impression that it only increases or decreases engine speed. I think that God just didn't want me to be Lawnboy 2-stroke owner.

The adjusting collar is simply a pre-set for the governor spring, by which you can shift the operating range higher or lower. The governor/throttle assembly consists of a slider that the hand throttle moves. Attached to the slider is the governor spring, which is tightened when the slider moves in response to the hand throttle being advanced. The tighter spring means more air pressure is needed to blow the air vane toward the closed-throttle position, so the vane moves more toward the wide-open throttle position, increasing engine RPM. In other words, with the engine off, the air vane is in the relaxed position which is also wide-open throttle. You can see this when you remove the air filter with the engine not running.
Anyway, by pre-setting the governor spring with the adjustment, you control top RPM as well as idle speed - they move together as a 'bracket'.
There is a rather limited adjustment possible. Another thing to play with is racing the engine by manipulating the air vane. I use any kind of stick that's handy. As long as there's a good blade on the mower you can't overspeed the engine. Usually the power requirement of the blade and the output of the engine equalize around 4000RPM or less. The blade sucks up power because it's basically a fan. The faster the engine goes, the more power is required to move the air. So, start the engine and set it on high-speed. Take your probe and push the air vane back against the governor spring and see if the engine picks up. You can do this over and over, like 'gunning' an engine, which helps blow out the carb, exhaust and ports.
If it doesn't react with a healthy blast of RPM, something is still wrong and you're going to have to check some more things out.