Kevin....Ya got spark, so get a new head gasket, remove the head and free up the stuck valves. That's most likely why it's spitting back out the carb. Careful, the valve seats can come out on this engine in my experience. I tend to use MMO to lube the valve stems to free up the carbon. While you are at it, clean the head, block surface and the piston head of all carbon. DO NOT use a metal scraper. Wood or hard plastic...anything softer than the aluminum parts. Also, you are likely gonna have to clean up that carb. I hope you have a bucket of Carb/parts cleaner and a B&S "L" Head single Cylinder repair manual....It'll help tremendously...I think I bought mine at Books-A-Million or Barnes & Noble....
After checking my manual, B&S did use a Compression Release system for easier starting. but I don't think that is your problem...It's the valves and the Carb....
Just one note of caution. These old B&S engines are terribly prone to shearing the flywheel key and thus putting them out of time (another reason they can spit back out of the carb). Just another thing to check and even more reason the have that repair manual at hand...The fins on the Cast flywheel will break off and ruin the balance if you don't do it correctly....
Myron B
CCSupplyRoom