101 Junior/Continetal Engine issues

Below are the problems:
1. The engine is not accepting gas (flat spot?). The tractor idles great, but when you give it gas it “shudders”. I thought the timing may be off, but that raised another issue.
2. How do you adjust the timing on this engine (Continental F124?). I have tried to turn the distributor without luck. I have loosed all bolts on it and it will not turn. I can rock it back and fourth (so I know it’s not rusted in there). Picture Link
3. There is a know on the distributor that you can “pull out” and turn, but it seems to have no effect on the engine. What is this knob for? Picture
Link
4. I am also having a hard time understanding how the governor works on this tractor (this could be all of my issues). My understanding is when the tractor is under load the govener will advance the gas to give the engine more RPM’s. If I am incorrect please let me know. All of the issues above are happening wit the governor hooked up and with out. Picture Link

Any help would be greatly appreciated. We are planning on converting to a 12 volt system, but would like to get the tractor running correctly before we do this. Below are the next steps I was thinking of:
-New points
-Buy a 6 volt battery and 6 volt coil.

Question 2: The knob is pulled out to add oil to the distributor bushings.

Question3: You are correct in your assumption.