Another 'mechanical' thing crossed my mind that I failed to mention earlier and will result in what I consider an rpm 'flutter' rather than a broader rpm range 'surge' but is worth mentioning.
Is there a governor link spring on the governor link? The spring is actually fitted over the link and attaches to the other hole in the throttle lever (red arrows) and to the governor lever (black arrows).
The governor link spring takes the slack out of the linkage and thereby eliminate the rpm 'flutter' mentioned above. Just something else to check while you're at it.
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