This was one of those days you start (sooner or later) to regret even waking up.
I had the alternator inspected because of high output voltage and got i back same day. Charging is OK typical 15V for this unit, but charging light indicator circuit is non-functional. So i have the charging light on all the time even though alternator outputs its designed values.
We put it back and started the craft. It fired right away, but during few first firings we heard a sharp sound of something hitting somewhere. We inspected engine area and drives right away and discovered that one of the prop blades had hit the bearing housing at the end of engine. There was some minor damage to the tip but not too critical (i hope). I will post pictures of the damages later. But blades hitting the bearing housing; how was this possible ? We had plenty of clearance between blade and bearing, but we discovered that while engine starts to fire blades bend back and forth quite a lot until engine starts to run and blades settle down to normal spinning. This is still a mystery to me, but i'm already planning to modify thrust shaft for more clearance for propeller back and forth.
As if this hadn't been enough we went out for a ride, only to discover that engine wasn't gaining rpm and was sluggish. I suspected breaker point ignition to be cause for this and indeed i was right. We had a new spare and did a replace. Engine ran nicely and we took a tour to close by bay ~3km (1.8miles) down river. We topped 52.3km/h (32.5mph) on our way back and slowed down for narrow river run. Then it happened for the first time (with this set of breaker point contacts). Engine died suddenly and we had to adjust gap between contacts to make it run again. It lasted for ~1minute when we had to do this for second time, only to last another ~1minute or so until next stop. Fortunately we were so close to hoverport that we managed to get the craft ashore with thid adjustement, otherwise we'd run up of adjustement possibilities. This was the exact repetition of problems we experienced during second test drive.

It was fun as long as it lasted, but i would have hoped it to last little longer than it did today.
I'm getting "new" distributor with breakerless ignition !