I figured this out. I changed the transmission oil (90wt) at 300 km. The Kymco Dealer said to fill the transmission up to the weep hole (as you do in automobiles)
which was completely wrong. The People 150 trasmission holds 180 cc of 90wt gear oil. (180 cc is a weird "french" measurement which translates into 6.08 oz American)
At anyrate, if you fill to the weep hole that is approximately 12 oz which will blow through the vapor hose to the air filter and soak it. Once I realized the problem corrected the transmission fill amounts, cleaned out the air box and washed the filter with gasoline (will get a new one soon) and that was that. The scooter runs great.