The oil is splashed from the gear that runs off the cam gear. Have you replaced the bushing in the timing gear there are oil holes for it to get lube. When you remove the gov housing there should be oil in the housing if it shows no sign of getting any oil maybe you should remove the gear. Before you remove it get the dots lined up on the cam gear and that gear. There ill be two dots on the cam gear and they align with the two dots on the timing gear that runs the mag or dist which ever you have. I have never seen the thrust bearing you have run dry most are gummed up from years of sludge but you do have a problem if that bearing is failing.
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Today's Featured Article - Oil Bath Air Filters - by Chris Pratt. Some of us grew up thinking that an air filter was a paper thing that allowed air to pass while trapping dirt particles of a particles of a certain size. What a surprise to open up your first old tractor's air filter case and find a can that appears to be filled with the scrap metal swept from around a machine shop metal lathe. To top that off, you have a cup with oil in it ("why would you want to lubricate your carburetor?"). On closer examination (and some reading in a AC D-14 service manual), I found out that this is a pretty ingenious method of cleaning the air in the tractor's intake tract.
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