Manuel,
Wow. 136 views and no replies. Sounds like low compression. Could be the head, but have you checked the piston to head clearance? Maybe compress some by pulling a gasket, lowering the liner? Some ideas.
I think most people are reserving comment, me in particular since I have never run the ST60 in any serious way. But, this sequence of events does seem pretty familiar. One of the few things I do know about it is that, unlike most engines useful for stunt, you *can* get too little head clearance (as indicated by kicking back, unexpectedly flaming out, etc). I am not sure that this is just a matter of the raw compression, it may be just the clearance. I know the same thing happens to the ST46, and even .003 additional clearance will usually cure it.
Like most things, there was a huge overreaction to it, and I have seen many ST60s with so little compression ratio that the are no stronger than a good ST46s. The most egregious example was from a (justifiably) famous stunt flier who set up an ST60 with so little compression that he also had to include a MASSIVE venturi, which was so large, it came close to quitting on release when the acceleration caused fuel starvation. This was in a kit-sized Shark 45, you would expect an ST60 to yank that around pretty good, but it was hopeless, squeaky lean at the slightest touch of the controls, but absolutely no power. I looked, and it appeared to have something like 1/16" extra head gaskets, and turning it over, it felt like the glow plug had fallen out.
I very strongly discourage anyone from "dropping the liner", its a questionable practice on a 40FSR, you sure don't have a timing problem with the ST60. Removing head gaskets is a potential solution, but I suspect that the modified head has already reduced the compression to the point that you cannot approach the stock value before the piston starts hitting.
The solution in the example case was to run more nitro. The owner was running 5% on recommendation of the engine maker, I talked him into 15%, which markedly improved it and got reasonable power. I was trying to talk the owner into running YS20/20, but for whatever reason he chose not to, and I was looking around for someone with 30% or who was carrying around some pure nitromethane to mix with.
So, the easiest and most obvious solution to lack of power due to low compression ratio is add nitro, keep upping it until something bad happens. Unlike a Fox (which also greatly benefits) you aren't going to break the engine, it will just start kicking back. But I have run as much as 30% nitro in a bone-stock ST46, including stock compression and head, with absolutely no problems aside from running out of gas right after the triangles, and tremendous power gain.
Brett