Is it possible that you are tightening the Clutch Spring Nuts down too much..?   They should not make the springs 'coilbound', and should each be individually adjusted to make the outer clutch plate lift off squarely.

If you have a centre punch or small cold-chisel, you can put two marks at the junction of the distributer and crankcase.  This will be a reference point for further experiments.   I did the same with one bike, and found it ran best when the marks were just misaligned by about 1/16 inch.   But at least I knew where to reset it.

Bit confusing this...  First is the washer supposed to be first on the shaft, or second , after the clutch basket is fitted..?

Second, what are the two threads on the shaft..?  Does the nut go on the big threads or the small threads..?   There must be two sizes of nuts.

I think you are spending too much time fiddling with the timing, when it might be that the carb is not set correctly.   Do you use any twist grip rotation when kicking..?   Have you got the idle mixture set correctly..?   
My B40 will only start with zero throttle, and needs to run like that for ten seconds before I twist the grip, or else it stops.   I suppose I could make some adjustments to make it better but have not yet tried, as it runs ok when warmed up to temperature.

Just to be pedantic, you said...
Then

Just below this mark , file another mark at the distance the book says before tdc it should fire.
So, if it is 3/16" before tdc , put your lower mark 3/16" apart.

You would need to put the second mark -above- the first mark.   Making the length of wire 3/16 longer.

Also when kicking from TDC, try to extend your swing forwards, for the maximum kick rotation.

Hi all, I finally got my BSA B40 on the road, so thought I would give it a trip around the lanes.
Above a certain revs, it sounded as if the crankshaft was leaving the engine.   So when I got back after the 5 mile round trip, I inspected the engine mountain bolts... They were tight.   

So I looked to see if it had a cylinder head steady... it doesn't, but noticed the tank was touching the 4 head bolts.  I then adjusted the single tank mounting bolt to give 1/4 inch clearance to these bolts, and took it for another spin.   This time the rumbling was not so great, but still there.

Back at the garage I noticed the centre bolt had a large washer under the nut, which was touching the metal of the tank.  So I repositioned it to only bear on the rubber washer.   I hope this fixes the crankshaft noises, but have not yet tried it down the road.

Will keep you informed of any cure.

I see that your adjuster is almost out of threads, so at the limit of it's adjustment.
I would run it for one hour and the chain will stretch a lot.   Then it will be time to remove a link.
After the one hour run-in, the chain won't wear much for the next few thousand miles.

From memory, the C15 Amal was 7/8 inch diameter.  So this would need the 22mm or 24mm Mikuni. 
If you go to 26mm, then the inlet port will need grinding out for gas-flow,

The C11 s a tinplate case, with about 20 small bolts holding it on.

Yea, I tried some of Halfords best blue thread locker, and thumped the nut up real tight.   Then adjusted the clutch springs to lift off symetrically.   A short test ride later, and all seems good to go for our next VMCC ride-out to Bala in Mid Wales.

After looking at the Cush-drive, I realise that it is not adjustable,   So just tighten the nut up sufficiently, and it should not loosen.   There is no provision for a lock washer, or locking pin or wire, it just relies upon being torqued up enough.

I have a 1950 C11, and was inspecting the primary chaincase, and found the nut holding the cush drive was a bit loose.   I tightened it up by punching on the castlations, but could not find any way of locking that nut in position.   
Short of putting a blob of weld on it, is there a better way of securing it..?

Could I just point out a few of that bike's modifications...

Metal Profile front forks, with 21 inch front wheel.
275x21 front, and 4.00x18 rear trials tyres.  ( IRC are best.) with security bolts.
Increased ride height at the rear, also maybe 60 tooth rear sprocket.
The engine internals could have been very modified;  Trials Cam and compression ratio.
Wide ratio gears.
Legal Ball end levers, and trials wide handlebar, Trials number holder.  Single Seat.
High level exhaust, Alloy Tank...

Maybe a few other bits as well.

Did you position the bush in that position for the photo..?  As it looks like the bush is in the correct position anyway.    Maybe a solution would be to drill the hole out, and then tap a thread with a bottoming tap to take a short pin.  Problem is, how thick is that casting, as it could leak oil, if you drilled straight through.
I take it any carnage was caused by the loose pin floating around in the gear box.   maybe use lots of Red Loctite next time.

If you set the slow running mixture to best revs, that is correct, but if you then go a little on the rich side, that will be best for the exhaust colour.   Remember, the screw is an Air-Screw, so turning it in increases the richness.