Hey Fitz,
I also have been the happy owner of a 742B gasser with the Mitsubishi 4G32. I've put a few bucks into it as problems developed but for the past few years, I've had no problems and love the machine. Below is a copy of the common tune up parts that I've made over the years. Reference your original problem I cured mine by changing out the points and coil with a Pertronix electronic ignition and coil. I want to also say that I'm no way affiliated with Pertronix.
After the swap over to electronic ignition I got rid of the miss problem, and it runs sweet. I also replaced cap and rotor which I searched the internet for the below listed part numbers. I think I may have also order something from Rockauto but be careful that they don't swap something out for what you originally ordered. I try to stay away from the dealer as their prices are so high compared to searching on the internet. But at times I've had to get parts from the dealer too.
All in all after the swap over this machine runs great but is a little cold blooded in winter below freezing for starting. But using the blocked heater or keeping it inside overnight cured that issue. I love my 742B so much that I actually found a brand-new original in cab heater that I installed.
As a side note another smaller issue snuck up on me and I started getting a gas smell in the garage. I found someone had removed the original electronic gas shut off solenoid. I did some searching and found the original manufacturer of the solenoid and purchased it through them even though the Dealer said no longer available.
I even rebuilt one of the lift cylinders when it started dripping. By the way I'm only a backyard mechanic so I've ventured into some unknown territory with hydraulics but happy with my outcome. I also finally broke down and purchased a new governor as one of the side seals was dripping on the old one and I couldn't find a seal replacement.
Regarding your latest dropping out of high RPM. Have you checked the oil level in the governor?
I know it sounds stupid because when I got my 742B I didn't know the governor had a separate oil reservoir. It's easy to check. If the governor is pulling the RPM's down, then I'd agree with the other comment that the governor is probably doing its job. But I'd still check the oil. If it was running fine in the past, I wouldn't mess with the governor linkage to carb or stops on the governor. I borrowed an older tach/dwell meter from a friend's shop in order to set the high and low RPM's.
If I can help with anything just ask because I'm a happy 742B gasser owner.
Mitsubishi 4G32 Gas Engine
Distributor Number T3T05772 C
Coil – Manufacturer – Pertronix - Flame Thrower II Part # 45111
Electronic Ignition – Manufacturer - Pertronix Ignitor II Part # 91943
Distributor Cap - Manufacturer – Standard – Part # JH67
Distributor Rotor - Manufacturer – Intermotor SMP – Part # JR80
Spark Plugs – Manufacturer – Champion – 405 RN14YC
Denso – W14EX-U
Spark Plug Gap .028 - .031 – Set at .030 for Electronic Ignition
Timing 5 degrees BTDC @ 600-650 RPM w/Vacuum Hose Disconnected
2800 RPM/Vacuum disconnected the timing should advance 10 degrees