Fuel in the crankcase is caused by a bad float needle and seat. Will need to replace and then change to oil. This manual may help with the governor question. You didn't post any model numbers so I am assuming you have an L-head engine.
http://dl.dropboxusercontent.com/u/12502267/Tecumseh/Tecumseh L-Head.pdf
Your Tecumseh model number is TVXL220-157205A. Should be covered in the manual I posted.