Mode Zero

Hi all.

Anybody care to hazard a guess at what ails my DC Spitfire?
I got it in a box of bits so it's an unknown quantity.
It runs on a prime, poorly.
When compression is backed off and the motor turned over by hand, you can see the barrel moving up and down.
Also the bottom fin on the head is touching the crankcase, and the ones I've seen in photos don't.
There is a washer between barrel and crankcase if I remove the head, but nothing between the head and the barrel.

Any ideas?

Fixed. Washer missing between jacket and liner. I filed down a copper washer, guessed the thickness and fitted it.
Works fine now!
The thing came as a box of bits so someone must have had it apart and lost the washer.

Stew.