Like Mike said that is a drain hole and it definately needs the felt in it.
Where did you get your rebuild kit and how complete it is?
Most kits you see at the local supply shops for around $20 are worthless. I go to my local CaseIH and buy the complete kit. I know it freaks a guy out when you hear the price but you are actually getting a "complete" kit and not just a couple random carb parts.
You'll have to pry that plug out. Take a small punch that will fit in that hole to get it out. You'll then put the little felt filler in there and you'll have to take the new plug and drive it in. The new one will be "dished"...take a punch that is just about the same diameter as the plug but still small enough to fit in the hole of the carb. Drive it in with enough force to flatten it out some so that it basically wedges itself in the hole of the carb.
If you have anymore questions on the rebuild just ask.
That filler and plug should be available through CaseIH. 60947D is the part number.
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