Made an inline spark tester, hot blue fire will jump 5/16" easy. And it keeps it up until crank shaft stops turning when the engine dies.

This indicates overly rich fuel condition or weak spark. Since you say your spark is good I say overly rich. Did you say you replaced the carb on this?

He said in posts 10 and 30 that he's tried different carbs with same result.

DL127, if you advance the throttle as slowly as possible, do you reach a point where the engine starts to stumble, or does it just flat out die?
If you can get to run at point where it is running but stumbling that is where I would attempt some adjustments on the carb jets and see what happens.

If the throttle lever is moved an 1/8" or so the governor slowly begins moving away from the carb opening the butterfly more. I have tried adjusting the low and high speed needles rich and lean every combo I can think of. It still slowly dies. I tried something crazy this a.m. Took my turbo propane torch unlit of course and stuffed the tip right inside the carb bore and cracked the valve open just to see what would happen when I opened the throttle. Same thing it slowly died. Something I have noticed is when I 1st got the tractor it would run fine except at high rpm. It has gotten to the point where it will only idle and that's it. I also noticed if the air filter is off I can see droplets and mist spitting out the bore of the carb a few seconds before the engine stalls out.

I believe ol' George suggested that a bad condenser could cause this behavior. I've noticed that his diagnoses have often been correct, so I suggest it is worth pursuing that.
Good luck!
Andy

I found the problem. It was the valves leaking thru. I pulled the head cleaned everything up good (found out the engine had a .010 over piston in it) sprayed a generous amount of wd40 around the valves and blew compressed air from the exhaust pipe and intake port. Massive bubbles around the intake, a tiny bit around the exhaust. So I lapped the valve seats, set the clearance, reassembled everything and fired it up. After letting it warm up a couple minutes I opened the throttle wide open. Its running like new. I thank everyone for their advice and patience. Now need to find a local shop that can regrind the valves and seats properly this fall. Thanks again.

Well, this one had everybody out in left field. But we are all happy that YOU nailed it.
And thanks for reporting back on the findings, it may eventually help someone else with the same problem. Too often guys ask for help, bending everyone over a log, and either they get it fixed or don't and you never hear from them again.