Ah, the joys of carb'd engines. Wait, what's a carburetor?

It starts well when cold, which is good. That means the carb probably works pretty well and is in good enough condition. I'm guessing that the hot start problem is probably due to one of two things: Either the mixture is too rich, which wouldn't necessarily cause the same problems when cold because of the higher air density, OR you're getting too much heat into the carb or the fuel system. Do you have a carb spacer/insulator between the manifold and the carb? Also, are your fuel lines routed somewhere close to the exhaust or someplace else where they can heatsoak while the engine is off? You might try insulating the fuel lines or changing where they're routed. If I remember correctly, most hot start problems with carbs come from fuel boiling or vapor lock problems, or just an overly rich setup.
Do you have an electric choke or something similar that could be malfunctioning?

I'm not entirely sure that the timing has anything to do with your problem, I think it's just fooling you by correcting a problem caused by something else. That's assuming of course that it's set correctly at the moment. Timing for cold and hot starts should be the same, because there isn't really any way to change the timing between the two. So yeah, the timing should be checked just to be thorough. Even if that's not the problem it would be good to know that the timing is set correctly so you're getting the best performance.

Oh, and how aggressive are the cams? And what you you mean about the starter dragging, is it not disengaging properly?