Maybe some restriction in the air intake duct on the top/rear of upper cowling?....a bird nest, wasp nest, something else?....

take a good flashlight.
carefully inspect the area where the muffler tube seats in the housing.

no obstructions on the cowling

Seems like removal of upper cowling cures it???....maybe what Rodbolt said...if anybody knows, it's probably him....

Now I believe I recall a similar problem a good while back....exhaust gases leaking into intake area....when you remove the upper cowling the motor gets the fresh air it needs....it's been a good while since we saw this problem but I'm pretty sure that's what it was!....good luck!...

I took a flashlight and checked, didn't see anything of significance...
(wasn't sure what to look for..?)

also, what can I do about this..?

I was talking with another fellow with the same motor, he figures the carb's are adjusted wrong.., (TOO RICH)

Should I try to have them re-adjusted...?

If motor runs fine with top cowling off how can carbs be mal-adjusted?...

yes, doesn't sound logical, however, seems to be lacking air

performed a borescope inspection to the top of the pistons

the motor is still in-tacked and running..., with that being said, I am still trying to solve this issue, before having to spend any more money in diagnosing the problem.
It was suggested previously in this forum, to check the, "muffler tube seats in the housing", however, couldn't see anything, and to really do this inspection would require taking the power head off to check if this is the problem, unless someone knows a better way...?

The Marine shop's lead mechanic, I had taken it to, had taken the spark plugs out, and checked each piston with a borescope inspection tool. He said, 'the bottom piston looked to have a few small indentations on the top end on the surface of the piston, also there was a little very small pitting, at the bottom end of the surface, of the piston.'
His analysis was that, 'something had come through and dented the top surface of the piston, (upper end) and perhaps the piston isn't burning all of the fuel..., which could be the root of my problem.
He suggested to overhaul the engine or if I keep running it, something will blow and then I would have no choice, but to replace the power-head....., this would be a bitter pill to swallow, as to the cost of fixing this, if I would have to do this. So, I'm not sure how believable this is.

I am really looking for any 2nd or 3rd opinions, anybody credible want to weigh in on this...! help..

still looking for any expertise opinions out there...

I am another that believes there is an exhaust leak under the cowling causing this, but do not know how to find it.

Just for the info , my C40 had a problem at high speed miss with cowling and silencer on.
I could take them off and running into the wind it would run fine, but running with the wind it still had a high speed miss.(running too rich it turned out)

Seems a previous owner drilled out the main jets trying to make it a 50 I guess. Took some time to find that problem.

But it did not act like yours. As it sounds like it only happens at WOT and clears after idling for awhile.

The bottom cylinder powers the fuel pump, if it is leaking into the crankcase, maybe it is dumping too much fuel and causing an over rich condition just in #3. Something to check for anyway

I appreciate your comment:

how would I check it...
is there anyway to check without taking the motor apart..? any kind of test technique.?

or, how would I fix that..?

If it's running too rich, what should I do...?

If the exhaust is leaking into the cowling ares then the motor is trying to breath partial exhaust fumes(which would be very low on oxygen).....maybe run the motor at idle with the cowling off and look carefully for any signs of exhaust leakage(such as smoke)....