Thanks for the replies.
Yes, I put an O-ring on and I have to admit, it made a difference. I cut the groove a little deeper than I calculated as it was just binding a bit too much.
When I put the engine together, I put the piston in the cylinder and spark plug on the end. I couldn`t compress the cylinder with my finger over the hole in the cylinder head. Likewise it hurt my finger sucking on it when I pulled the piston out. I`ve definately got a good cylinder/piston seal.
I put the valve all together again and actually gave it a bit more of a grind in its seat. Sucking by mouth through the valve block with the springs in position doesn`t let any air through so I`m sure the valves have an excellent seal. (Before I gave it the extra grind I think there was a little air getting through one of the valves). The valve block is perfectly flat and I`ve used a small amount of hylotyte red between the head and valve block - only a small amount but just something to seal it for sure.
I`ve also remade the flywheel. The steel one, although with a lovely hub was not heavy enough. This cast one seems much better. I used Johns suggestion of tapping through small holes between the cast iron outer rim and the brass centre hub, screwing into these and then facing the heads flat. This was a super idea and has locked the hub in position for sure.
I can hear the spark plug, like I said, I had an issue with some seemingly random sparking last night which I`ll investigate later but hopefully it has stopped

I think I need a connection between the engine base and the electronics box to ensure that the spark isn`t tempted to jump across to the outer sleeve of the spark plug cap rather than sparking at the cap.
It all seems good to me and with Doug telling me that I won`t necessarly see the top spring moving until it gets going then I`m more confident.
My only issue is that when packing away last night, I got a small drop of fuel in the pipe. Turning the engine over by hand, you can see the fuel moving up towards the valve block (cylinder) by the suction of the piston moving out on the intake stroke but it also moves back a little during the compression stroke and even a little on the exhaust stroke. I don`t know if I should worry about this, I thought the valve should be shut during the compression or exaust stroke and so the fuel shouldn`t go back down the line...then again only a tiny tiny change in pressure would cause this to happen.
I can only presume it is my timing and as I said earlier, I need to start it with a drill for testing rather than a pull string.
Chris