I run the bike with the air liver full closed it does not seem to make any difference open or closed...
I run the bike with almost fully retarded, it seems to like it that way...
I checked the contact breaker point gap before riding it was 0.008 inch however it should be 0.003...
OK, so the three things above are a worry - something is not right.
First, 0.003" for the points gap seems wrong - usually something like 0.012", so check for your specific mag before you do anything.
Related to this is the ignition timing, so set the points gap first. The bike should do almost all its running at full advance. There is a reason for this: the magneto is built (new, which yours is not!) to have its maximum strength spark when set at full advance. You might want to retard it a bit when you start the bike, but after that (barring a killer hill with hairpin bends) it should be full advance all the way.
So you need to set the ignition timing correctly - you probably have a handbook that tells you what is required for your bike? Probably about 35-40 degrees BTDC fully advanced.
Lastly the air lever. Again, most running should be done with the air lever full open. If not much happens when you move the lever, the first thing to check is that the cable is connected to the air slide. The air lever should take the air slide from fully closed to fully open - look into the mouth of the carb and make sure it is doing this.
If the slide is working, and the engine wants to run with the air closed, you have a problem with not enough fuel getting through the main jet. First check the number on the main jet (at the bottom under the needle) and compare with the specs. If it seems to be the correct jet, check that it isn't blocked, then check that the level of fuel in the fuel bowl is a couple of mm below the top of the jet.
When the main jet size and the fuel level are correct, the bike should like the air lever fully open for flat road running.
Any of these things - points gap, ignition timing, mixture - can cause the engine to run hot.
Leon