318 Deere Engine Speed Problem

I have a 318 that I’ve owned for close to 20 years. It’s a 1983 model with a B43G engine. I rebuilt the engine 7 years ago. Recently it’s developed a problem where if I just crack the throttle open, the engine speed increases to a point where it seems like it’s over speeding. I thought it may be the governor, but all I have to do is move the governor arm on the top of the engine about .050-.080 to contact the dashpot and the engine speeds up like it’s running at full throttle. I’ve also done the following:

Had carb apart and cleaned twice
Installed new float needle valve, seat and top gasket
New plugs
Checked points and coil
New fuel filter
Checked intake manifold mounting bolts
Checked for leaks on intake manifold, carb mount, and throttle shaft

It seems like it’s sucking extra air/fuel in when I crack the throttle open, but I’m not sure where. I hasn’t been running right all year, slight miss at all speeds, some surging, died twice from what appeared to be gas coming out the top of the carb. Once it wouldn’t run over half throttle. I backed out the idle speed screw (the one on the top right of the engine) so I could get to at least idle. But I’m stuck now. Any suggestions please? Thanks in advance!
 
Andrew, it does not take much movement on the governor arm to increase the engine considerably while under no load. I believe that the plastic governor ball spacer in the cam gear has cracked and is allowing the governor balls to rotate. In the 1980's there was a problem with some of the ball spacers cracking as they aged.
The only way the engine speed can increase is if the throttle butterfly is opened. You will have to have the correct ratio of fuel and air for the speed to increase.
 
Thanks for the reply. I'm aware of the plastic spacer that your are refering to. I remember it from the rebuild. You may be correct, very little movement of the governor arm increases the engine sped considerably. It seems to run OK, just no speed control. Plugs look great too, which tells me I have no mixture issues.
 
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