You don't have to do any conversion to run it on gas.
Black on the spark plugs means your mixture is too rich. The lower screw on the carburetor is the high speed mixture screw. Turn it in until the RPM starts to drop, then open it back out 1/2 turn.
Compression on the distillate engine was rougly 5:1. Gasoline is 5.9:1
Inframe rebuild by a mechanic will probably run you around $2,000. Add another $500 for splitting the tractor for a clutch job. Add $1,200 plus for new tires and tubes all the way around.
As is for central Indiana would be between $750-$1,000.