They look about right.
I use 0.004" for just about all engines because I am lazy & cheap so a loose leaf .004" feeler, cut to some easy fit shapes works well for me.
Running for a long time with excessive valve lash can cause abnormal wear on the cam and excessive wear at full open.
Apart from that it sounds like a blockage in the carb.
Manually move the governor lever to increase the revs overiding the governor.
If it revs cleanly all the way to WFO then you have a governor problem.
In particular the damping spring that sits over the linkage from the throttle to the governor lever.
Then saturate the manifold ares with the engine set to WFO.
If the engine changes speeds or blows white smoke you have a vacuum leak.