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.

 
AI confirmation

To install the governor shaft seal (OEM part 692407) on a Briggs & Stratton 195707 Spec 0468-E1 (or similar horizontal-shaft single-cylinder models), the seal goes in from the outside into a recessed area behind the governor arm/lever. Some of these engines left the factory without the seal installed (only the bronze bushing was present).

Tools and materials neededNew seal 692407
Wrenches/sockets (typically 3/8" or 10 mm for the lever clamp nut/bolt)
Needle-nose or regular pliers
Small flat-blade screwdriver or pick set
Deep-well socket that fits over the shaft and contacts the outer edge of the seal (for driving it in evenly)
Clean engine oil or assembly lube
Optional: non-hardening sealant (light film on the outer edge of the seal if desired)
Rags, brake cleaner or carb cleaner for cleaning

Step-by-step installationPrepare the engine
Let it cool. Drain a little oil if needed for access, and remove any covers/guards that block the governor area. Disconnect the spark plug wire for safety.
Remove the governor arm/lever
Note or photograph the positions of the governor springs and throttle linkage (which holes they use).
Disconnect the springs and linkage.
Loosen the clamp nut/bolt on the governor lever.
Slide or gently pry the lever off the shaft (spread the clamp slightly with a screwdriver if it’s tight).
Clean the area
Thoroughly clean the protruding shaft, the bushing face, and the surrounding crankcase area. Remove any old seal remnants, dirt, or oil residue. Inspect the shaft for grooves or damage (a badly worn shaft may still leak).
Check/prepare the bushing recess
There should be a slight recess (roughly 2 mm or enough for the seal) behind where the arm sat.
If the bronze bushing is protruding flush or beyond the surface, carefully and evenly tap it inward a short distance with a deep socket so the seal can seat. Do this gently—do not drive it all the way through or damage the bore.
If no old seal is present, simply clean the recess.
Install the new seal
Lubricate the inner lip of the seal and the shaft with clean engine oil.
Orient the seal correctly (sealing lip faces toward the engine/oil side).
Slide the seal over the shaft.
Use a deep-well socket that bears only on the outer metal/plastic edge of the seal (not the inner lip). Tap evenly and lightly with a hammer until the seal is fully seated in the recess—flush or slightly below the outer surface. Work carefully around the circumference if needed so it goes in square.
Do not over-drive it or damage the lip.
Reinstall the governor arm and adjust
Slide the lever back onto the shaft.
Perform the static governor adjustment: Hold the throttle linkage/carburetor throttle plate in the wide-open position. Rotate the governor shaft (usually counterclockwise or until the internal paddle contacts the governor cup/gear) as far as it will go. Hold it there and tighten the clamp nut/bolt securely.
Reconnect the springs and linkage in their original positions.
Final checks
Reassemble any removed parts. Refill oil if drained. Start the engine and check for leaks around the shaft. Verify the governor works properly (engine should not overspeed or lag).
 
The diagrams show the bushing outside the case, not recessed. The pic of poster's engine shows that also, but probably not fully seated, with the bushing almost to the hole in the shaft for the cross pin. It does look like this shipped without the seal.
 
Okay guys the only way to be for sure as to where bushing should be is open up the case. The paddle end in the governor cross shaft must match with the pin on the governor/oil slinger. When lined up there will a very amount of in out play. This should tell you if the bushing got to be recess or not.
 
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