First you can forget about the governor. If the gov was acting up the engine would still run smoothly - it simply would not respond to throttle handle inputs (ie. it will just idle or perhaps race).
When you say the ignition is "goofy" tell us more? Apparent weak or intermittant spark, spark timing jumping around or ???. Swapping in a known good magneto (and timing it correctly!) will quickly confirm or eliminate an ignition problem.
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Assuming it's NOT the ignition then I'd be looking at the valves. Gas running out of a known good carb can mean an intake valve is stuck open or clearance set WAY too tight (ie. valve not closing fully).
Could also be the cam drive gear hub has broken so valve/igniton timing are off (happens frequently when a live hydraulic pump is installed).
If that's the problem a compression check on all 4 cylinders will quickly find it.
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