JD L110 - Briggs 33r877 - No discernable cause, tremendous smoking / running issue

I'm at my wit's end with this thing - I've been fiddling with engines and building motorcycles and stuff for 30-ish years and I can't figure out what's happening. Called in another older old head to re-check everything I had done and generally sanity-check.
 
Here's the story; some time ago a funnel was left in the fill neck of the tractor after fueling and rain contaminated the fuel tank, and water was then circulated through the fuel system and engine during attempted starts / bad running - anecdotal, what I was told by the family member to whom the tractor belongs.
 
I pulled the spark plug and disconnected the fuel system, drained the tank, pulled the carb, cleared the pump and lines with low pressure air. Cleaned the carburetor and re-assembled it according to the manual. Verified there wasn't a bunch of liquid in the cylinder. Drained and checked the oil for water, found none, replaced with fresh synthetic 10w30.
 
No more problems, ran fine. Family's happy. A week or so later I get called back because it's smoking like crazy and making a bunch of noise. I go back out and it will only start on full choke, reluctantly at that, and makes a ton of smoke.
 
Compression read at 140psi. I tore the engine down progressively from the top, finding nothing amiss - no bent push rods, bent valves, dropped seats, errant piston-ring fragments, screwed seals, ruined decompression system parts, destroyed bearings, damaged cylinder bore, or anything else amiss.
 
Built the engine back up with fresh gaskets and seals, tested compression at 140psi. Went through the intake tract from the filter tube to the head again, including putting a parts kit in the carburetor and cleaning the body and etc again.
 
Back on the machine, no change in operation - starts on full choke and runs on the governor, smoking like hell, dies off-choke. If I regulate the intake down to almost nothing with my hand or by closing the butterfly further than the governor is doing, I can get the RPMs down a bit but it's a very narrow zone of RPM / mixture and it falls on its face after a few seconds of lower-RPM running.
 
Changed the float needle, air screw (adjustment of which did nothing) and other hard parts from the parts kit back to the originals, inspected the new seals in the carb for damage, put everything back together, no change.
 
Pulled the engine again and double-checked that the valves were in time, this time having me auld dad of some 60-odd years engine and engineering experience watch and verify everything, from the timing marks to re-setting the valve lash and checking it again (Set to five thou as per the manual) to verifying compression. Went through the carburetor again two-man checking every part.
 
No change. So what stupendously obvious mistake am I making?