WELCOME!!
First off, i think that the 1987 had a 244cc 2PG motor. You said you got a rebuild kit for a 295cc. Is this correct? If so, is there any way you got the wrong rebuild kit?
Also, 117 after a rebuild is not very good. Should be around 140psi, maybe higher with a FRESH rebuild. I am sure someone else will chime in on this.
PS. Run your first tank of gas at a 40:1 ratio! after the first tank, run 128:1, which is 1 oz. of oil to 1 Gal. of gas!
Good luck!
Jon