It may be running better, but if you truly have the firing order set to 1-4-2-3 it won't do well when you apply a load to the engine. You can't look at another tractors distributor and assume your wires go in the same positions. Depending on how you install the distributor you can set the number one position anywhere. I thought you had determined earlier that the number one cylinder was at the 10:00 position..what was your method to determine that? Did you static time the distributor to number one cylinder when you installed it? Also, even if you static timed the distributor correctly, you still should use a timing light for the final adjustment. The last time I installed and static timed the distributor on my 35 it started and ran great but the timing was actually a couple degrees AFTER TDC at 400rpm when checked with the light.
As to the governor, does the governor arm that comes out of the front cover move freely? The governor is always trying to close the throttle the faster the engine revs. With the carb to governor arm link disconnected, if you push the governor arm forward, then rev the engine, you should feel the governor arm push back. If you do feel a distinct push back on the arm when the engine revs, then you know the governor inside the front cover is reacting to engine speeds and you probably have a linkage adjustment problem. If you get no reaction, you may have to pull the front cover to find out why.