If the stall is too high it will heat up. lots of cautions with pace laps hurts as well.
Is it shot: I doubt it, unless its really changed color or stinks of burn't.
Not a lot of cautions it took off at about 4000 ran 6700rpms but losses 3900 in the lap.to me it seems like it was locking up half the time. But we was fast
.127 is good .
red springs are going to raise your stall.
what is the air gap if its over or near .050 you need to remove some shims , need .035.
sand the pressure plate's and floater.
4000rpm is too high of an engagement, lower it to 3600-3700 and should clear up your problem i am betting. You would adjust the spring retainer screws or bolts counter clockwise to lower the engagement....1/4 turn on each screw should get you close, if not then go another 1/4 turn on each one.