8HP Briggs Governor Shaft Leak

It's a typical lip oil seal. The O.D of the seal looks like it's supposed to fit on the outside of the bushing in the block of the engine. I wouldn't think you'd ream the bushing and install the seal in the bushing.
View attachment 74671

Your two pictures looks like the OD of the seal might be larger than the outside protrusion of the aluminum casting on the outside of the block? (your block is not flat as shown in fig 46

Appears not machined for that seal you have seal that goes into the block on the outside even though the parts lists shows such?????????????
 
195707 Spec 0468-E1
There is no "quick fix" or short cut for this repair to make it reliable.

Items 552 and 691 in the attached diagram. Your shaft bushing is sticking out too far and the case will need to be opened up, and the bushing pressed into place properly with a press or a shouldered pin punch with the governor shaft removed. It has to be driven/pressed far enough for the seal to sit flush in the case properly. Do not use a flat tip punch because it will blunt the tip of the bushing and distort it.

It is possible the seal does fit inside, but you will have to remove the sump to determine how this engine was machined. B&S has used some mixed designs over the years.

 
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