This photo might help. The vane controls the speed. The serated round disc under it controls the engine RPMs. Turning it, a click at a time, raises/lowers the RPM.

People swear by Lawnboys but the governor setup is the most stupid thing I've ever run across.

This is only one of several governor setups. I don't have any good pictures. You will see the one end of the spring hooked to the black control lever and the other end on the white lever at the area where it makes a 90 upward.

Thanks Baymee for the photo. That is the carb that I have. Looks like I may have bent the spring too many times since it doesn't line up as in the photo. Does the big plastic like gasket go in between the two smaller gaskets when installing the carb? Also how many turns should the air screw be turned out from the seated position?

Here's a better picture. The spring doesn't hook to the vane as I thought. The spacer goes between the two thin gaskets. They usually act as an insulator.

Great detailed pictures. I don't see posts that JAMC got it running again.
I find Water in the gas and carb are 90 percent of starting/running problems on small engines. Just loosening the carb bowl nut would have let the water leak out but, there could have more in the gas tank needed to leak out also. Gas floats on water.
The picture, is of my much too small water filter bowl, installed on one of my yard machines and the highly visible result of a small piece of blue water dye pill put in my gas tank. You can see it's time to empty my bowl before the water reaches the carb. Engines won't run on water but, they will poot and backfire and such when water begins getting to the
piston area. LOL

I haven't gotten back to working on the mower since I still use my other lawnboy a 1977 model 7266 which still runs great but the crank bushings are getting sloppy. Two months ago our 1975 LB model 7225 D601 engine finally died. I tried repairing but ended up stripping the threads on the cyl. head for the spark plug. Not sure if a heli coil would work. That 1975 mower owes us nothing, it cut a hell of alot in its day. I miss it already. Funniest part is both LB's died when my wife was cutting. Is she trying to tell me something?