Re the carb and governor adjustment -- some slack is normal at that point when the engine is stopped, especially f you have the speed control all the back. The slack comes out when the engine turns and the weights in the governor spin up and take up the slack. As far as your power problem, it's possible there's a broken spring or that the thrust bearing in the governor is shot, but it sounds like you might just need to synchronize the governor to the carb, which involves an adjustment to that very rod that you're talking about.
With the engine OFF, disconnect the clevis at the front of that rod by pulling out the pin that connects it to the arm on the governor. There should be a cotter pin or a bent nail or some twisted wire holding the pin in place, and it may take a little fiddling if it's worn, but it will come out. Once the shaft and the governor arm are apart, push your speed control lever (back by the seat) all the way forward. Then push the governor arm all the way toward the rear of the tractor. At the same time push the rod to the carb as far to the rear as it will go. Adjust the clevis (you may have to loosen a jam nut on the rod) by threading it on or off the shaft until the pin will fit back in place when holding both parts toward the rear. Put a new cotter pin in to hold everything together.
Try it like that and see if it fixes the power problem.
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