Hey Joe, I've been down this road a couple of times myself. There is no specified position of the gov arm. The gov is adjusted by loosening the screw that clamps the gov arm, then rotating the gov arm to give the
carb WOT, while turning the gov shaft back so it rests against the gov spool.
It's tedious, but before you can do any of that, you have to ensure your spring is somewhere near correct- it looks pretty low on the arm compared to most adjustments I've seen. Also, the throttle actuating rod you fabricated is making contact with the throttle plate and that will mess you up. It should have a bit of a hump in it to clear. Also, it should go in the hole by itself, but that isn't specified in the book, just by drawings. That spring looks very stretched.