I run Merlin plugs with 1 extra head gasket on 10%nitro fuel. Generally fly with an APC 5.5x2.5 prop and get about 20K on the ground. Performance is excellent. What size prop are you using?
I would look for air leaks - venturi, backplate, under the cylinder, non flat plug mating surface. If none of those are a problem, pull the engine apart and check the fits. How new is the engine? It may be tight. If well used and some dirt got in, it could be shot that way.