Hi Jack, Here's what's in the Tecumseh manual for trouble shooting a surging engine;
SURGES OR RUNS UNEVENLY
-Fuel cap vent obstructed
-Dirty carburetor or air filter
-Carburetor improperly adjusted
-Governor sticking, binding or
-improper RPM setting
-Carburetor linkage, shafts or
shutters sticking or binding
-Incorrect spark plug or Intermittent
spark, check ignition
There may be tiny air passages blocked in the carb that didn't get cleaned out when you cleaned the carb.
This came up on a power washer over on the other forum and turned out to be worn governor linkages with too much play in them. Not suggesting messing with the governor either, but at least wiggle the rods and butterflies to see if anything moves around a lot.
I know you said that you rebuilt the carb, but did you clean the 3 small holes that go into the carb throat from the area in the side welch plug (assuming this is a float style carb)? You can use a strand of phone wire to go through them to insure they're open. If any of the 3 are plugged, it can exhibit the same symptons.