Is the safety valve blowing? That appears high for normal running. Most toy steam engines run fine with 10 to 20 PSI.
If it takes that much pressure, you might have binding or valve timing might be off.
Not sure how it can be off bud? It runs fine and has bags of power
Well, if the gauge is right that it’s at 40 PSI (definitely possible being gas fired), it should have lots of power. Got any other Mamod SV’s to swap it with and see if they blow off at a different pressure? Or an air compressor with regulator to check the gauge?