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My KE7 drove me crazy with misfire, for a long time. It would run good for awhile, then start to drop a cylinder. Everything was new. I finally figured out that the old bedding compound on the pads under the Bendix coils had a very, very high meg-ohm level, resistance. I just stuck my meter leads across the pads and got a reading. I cleaned and cleaned them until I no longer got a reading on my ohm meter and it has run like the wind and idled right down nicely, ever since.ever since. Almost OMC-like run quality.
There was also a bulletin issued once, that said that if you were running a green top on a heavier boat, it might be necessary to back the throttle off until the engine ran at its highest RPM, because basically, the ignition could over-advance on a heavy boat and cause internal engine damage. Stupid design, but true. I had this happen to ME, with a KG4. It struck me that the OPs’s description of the original problem sounded kind of like this, especially when he said “it ran backwards for a minute.”
Long live American manufacturing!