Surging is almost always caused by a too lean mixture, be it a simple adjustment, a clogged passage, or vacuum leak.
All the governor wants to do is hold the selected RPM, it doesn't think about what it's doing, it just modulates the throttle plate position.
See if a partial choke will stop the surging. If so try adjusting the idle mix. If it doesn't help or has no effect, there is likely a clogged passage in the carb.
If this is a Holley carb, consider trading it for a rebuilt Zenith or MS, whatever the alternative was for that model. The Holleys were very troublesome on those.
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Today's Featured Article - Third Brush Generators - by Chris Pratt. While I love straightening sheet metal, cleaning, and painting old tractors, I use every excuse to avoid working on the on the electrics. I find the whole process sheer mystery. I have picked up and attempted to read every auto and farm electrics book with no improvement in the situation. They all seem to start with a chapter entitled "Theory of Electricity". After a few paragraphs I usually close the book and go back to banging out dents. A good friend and I were recently discussing our tractor electrical systems when he stated "I figure it all comes back to applying Ohms Law". At this point
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