This may be redundant but let's start off with some basics. Every carburetor that I'm familiar with has a venturi. This is to speed up the air flow thus causing a low pressure area (lower than atmospheric and also referred to as a vacuum). Being as the atmospheric pressure (14.7 lbs) is pressing on everything, including the fuel in the tank it forces the fuel toward the low pressure area (the venturi) When a fixed throttle carb, like that on a hit and miss engine is operating the fuel needle is adjusted for the amount of air flowing through the carb to provide the proper air/fuel ratio which is actually 14.7:1. If a hit and miss engine wasn't governed the rpm would be very fast due to the size of most of the carbs.
Now onto the Lunk carb. The nonpareil generator which is what the Lunk carb we're talking about is named has no basic venturi. The venturi is formed by the reduced area formed when the valve lifts from it's seat due to the vacuum created when the piston is on the downward stroke. With this in mind the amount of lift of the valve needs to be controlled to form the venturi area for a given needle setting. The lower the valve, the smaller the needle setting and vise versa until it opens too far and then there is no low pressure area formed. I have never tried to operate a Lunk carb without the valve but I would assume it would be hard to draw fuel because of no venturi. As I had stated in another reply there would be no real reason to have this type of Lunk carb on an engine with the fuel level lower than the carb although I would suspect it should still operate properly. If the fuel source is higher than the carb and you would start opening the needle valve the fuel would start flowing due to gravity and weep or run out of the needle depending on how the needle was adjusted. I can't swear that I know what the original design intent was for this carb but I'm sure that the valve is to shut off the fuel flow when the engine isn't running otherwise it would run out of the needle valve.
I would say to adjust the valve travel to a minimum amount, .025-.03 off of the seat. Start with the needle just cracked. Turn the engine over and see if it starts. Probably not. Choke the carb while turning the engine over. It should hit or try to run. If it does but won't keep running open the needle a little more and repeat the steps. At some point the engine should continue running and then it's just a matter of fine tuning the needle for that particular valve setting.
It's surprising how small of a venturi opening is needed for slow speed operation.
gbritnell