your hand is restricting air intake. reducing air intake makes the fuel/air mix richer. The motor needs a richer mixture than it is getting.
My guess is that something is preventing fuel from being delivered to the engine. Check your entire fuel system from the tank cap vent to the filters and lines and the carb.. all the way to the intake manifold on the engine block.. check for fuel and/or air leaks. Definately clean the carb and adjust the float..
Minor scratches on a piston or cylinder wall mean little.. and mean nothing as far as your problem goes..