I usually identify EP oil by the smell. Straight oil smells like oil, EP oil burns your nostrils. (Even engine oil is not straight oil, it has detergents etc. that give it an odd smell). How badly EP oil smells depends on how much sulphur it contains. They used to sell special hypoid oil for outboard leg lower gear sets that had so much sulphur it was black and smelled worse than a blocked toilet. Incidentally, EP oil doesn't eat copper quickly, it happens quite slowly. I once had a car with bronze thrust washers behind the differential's side gears, and it used EP oil. On the other hand, after 4 years it ate one of the washers, and ended up with a chunk of bronze stuck between two teeth of the crown-wheel.
For the speed you will be running at, SAE90 or SAE140 should be fine. One of the advantages of high viscosity oil is that it doesn't leak out as readily as the thin stuff. The limitation when you use something too thick (like grease) is that there is so much viscous drag that it heats up the gearbox housing and can ruin the oil and the seals by overheating. That tiny gearbox just doesn't have enough surface area to stay cool at engine speeds.
I don't like the sound of modifying that oil seal, but I haven't seen it. Some seals are double-sided: they have an oil lip on the inside and a dirt lip on the outside. That makes them last longer in a dirty environment such as yours will be encountering: the dirt seal keeps the grit away from the more delicate oil seal.
You mystified me completely with the governor problem. I don't like the idea of modifying it even slightly, since you would then need a development job to make it work properly. In the meantime, until you eventually got it sorted, it would be at risk of sticking and blowing your engine, which can be very irritating. Worst case, if you just can't get another part like the original one, my solution is to make a new part exactly like the original, so I don't have to modify any of the mating parts. As soon as you change several parts at once, you are inventing a new governor. That kind of thing is OK when you are trying to teach an old engine to do something entirely different from its original purpose, but when you are really just trying to reinvent the wheel, it is a waste of time: just make it the same as B&S did. They already wasted all that time, why do it again?
