Dude, first nitro and it's a savage. The 1/8th's are a bit pickier sometimes, but keep at it.
It doesn't matter too much where ya pinch it, but you got it in about the right spot.
When it says 3 turns out, that's 3 complete (360) turns. Just to clarify.
What fuel are you running? The .21's need at leaste 20% nitro to operate.
One onther thing I would suggest is take the thing to your local hobby shop, or track, and get an experienced nitro driver to take the needles out and check for clogs in there. If you have never done this, get help. if you take the needles out and bugger them up putting it back together, the carb is screwed and it'll never run right. this is something the you just have to see done, it's really difficult to explain it effectively. If there is some junk or rubber o ring shavings in the HSN or fuel collar it'll make the engine act cranky even when the needles are set to factory. This is not uncommon, and is usually the first thing experienced drivers check when getting a new engine.
From your last post, it sounds like the LSN is lean, but smoking means that it's rich. Confusing, but solvable. Check for crud in the HSN, and make sure you have the right fuel.