Cleaned my carb out from the junk I found in the other thread and she's running beautifully at idle now! But there's another problem:

In Park or Neutral I can rev the stuff out of the engine in the Demon to even almost 4K and snap my foot off the pedal and the RPM plummets but settles at about 850RPM just fine. However, when I do the same in gear (either holding the brake or moving forward), the instant I take my foot off of the pedal the RPM plummets but either chokes the engine so it settles at approx. 250RPM or kills the engine outright. If the engine just chokes to 250RPM, it will pretty quickly go back up to 850 where it should be, but still this shouldn't be happening, methinks?

I have checked all gears and it's only when the engine has load from the transmission (904). I think it might have to do with the transmission, but something tells me I'm an idiot for thinking that. Any insight?