I have a TE-20 and if the engine loses gas, it will sputter and slow down immediately in gear. The governor mechanism will move also. Some tests. Does it idle and respond to the throttle with no load and not in gear? Can you hook a PTO driven implement to it and operate it with no hesitation from the motor without it being in gear? If it runs fine doing those things then it might have a problem with the drive train. Jack up one of the rear wheels, lock the clutch down and turn the rear wheel and see if everything turns okay in neutral and with it in all the gears. It should be smooth and the brake should not be binding. Try that on both rear wheels. Hopefully, you have no drive train problems. If you do then the best way to see what is going on is to take the top of the axle housing off. Taking the top off has to be done correctly or you will break the little hydraulic valve. If your problem is with the engine not running right, then do the complete check of the timing and point gap and timing order from the distributor to the plugs. Also, see if the distributor shaft is reasonably tight and not wallowing all around. If they have an engine miss, they sound like a two cylinder John Deere. They are nice little tractors and I hope you find the problem.
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