Couple issues need some idea's

[stvski80085 139]

I will tomorrow.  I did pull spring off and set points gap.  It was off a little.  I will reset the govenor arm tomorrow and the rest of the list.  It does sound better already and is more responsive.  I have some surging from idle to 25%  I will dig in tomorrow and post pics or video if it's not resolved.  I think we are on the right track though.

[Gasaholic 254]

I'd also be carefully checking that wire going to the points that "appears" to be sandwiched between the PTO bracket and the engine block, make sure wire insulation isn't cracked or allowing voltage leakage to ground - That wire really should be re-routed though- Most of them I worked on were routed behind the front bearing plate along with the alternator wiring and came out through other side routed underneath the fuel pump to the breaker box.    Insofar as your bogging issue, I'd also be considering details, like exhaust appearance (black smoke?) if the engine seems to struggle under load, remember that at "high idle" (to no load RPM) the engine gets most of its fuel through the IDLE circuit until it transitions to under load, when it is then drawing fuel from main jet (2 separate carburetion circuits) - proper carb adjustments can make quite a difference, but under top no load, it would be pretty easy to compensate for a lean Main jet feed by adjusting the idle richer, and vice-versa, so you may need to dial back the carb adjustments to "initial" settings (When I'm never sure, I'll usually start both at 1-1/2 turns out from lightly seated, I can't remember offhand what initial settings were for K181 Carters...)   

 

A poor electrical connection or partial short in the breaker power wire from coil can affect operation under load (just like dirty or mis adjusted points)  If you don't have the diagnostic tools, you may have to splurge on a couple basic ones (a cheap automotive timing light can be useful, even without precise timing marks, you just need to make witness marks on flywheel screen and blower housing - just a sharpie can do - and see if timing is moving around from there.. Approximate location of timing marks can be calculated with an ohm meter across points with power wire disconnected from them, make your mark when rolling engine over and continuity breaks open to infinity, which is where points just start to open, which should be the firing point.)  a tachometer outta be a no-brainer investment (even a cheap sirometer - AKA Vibration tach will do the job nicely) so you can be sure you're dialing in your adjustments at the correct RPM ranges. and of course the aforementioned decent DVOM.    A quick test to see if your surging (that one you mentioned earlier between idle and 25%) is from fuel , or governor is, when it starts surging, take a finger and hold the throttle lever on carb from moving.. if it smooths out, it is a governor issue, if it stalls out or dies, it's a fuel issue.   

 

That would help to narrow down your focus to which systems you should be really looking at, instead of chasing a potential red herring. 

[stvski80085 139]

Thanks everyone.  It’s running great now.  Reset governor and carb today. Greased all the pto bearings and even tightened up the pto arm slop. Started and it works perfect now.  Nice to finally have it working again.

 

i do still need to look at the oil coming out the governor.  Will look at breather now that it’s running well.