Thank you AVB. Your response is much appreciated.
Corrected information re engine (removal of light corrosion revealed the full Model, Type and Code):
Family YBSXS 7242VF 274844
Model 406777
Type 0138E
Code: 000714YH
I will indeed do as you suggest, AVB, but I should point out that at no time have I separated the governor lever from the governor shaft. The governor nut (I assume this is the nut and bolt that clamps the lever onto the shaft as shown at the bottom left of figure 20 above) has not been undone until yesterday, and even with it loosened, the arm grips tightly to the shaft. Does this info change anything with regards to your advice?
I am still interested in verifying whether or not the degree of shaft movement is a valid method of diagnosing governor function.
Thanks again AVB. I will get the starter sorted, then get onto the governor diagnosis. I thought all the c clip style starter gears and clips looked the same, but most were only listed as suitable for single cylinder or up to 19 hp. I hope my local dealer has some in stock. The grass is going crazy here in New South Wales.