Yes, remove the governor cross shaft. Remove ALL parts/pieces from the block before machining. Only exception would be if it has a freeze plug in the location for the later style dipstick. You can leave that in. Leave the valve guides. Outside of that...... take everything else off.
Yes, you can reuse the cross shaft as long as it doesn't look damaged.
On the PTO: You may be able to source the screws elsewhere. FWIW, I would likely just get them from whoever you get the rebuild kit off of. I thought they were included, but it's been a long time since I ordered a mechanical clutch rebuild kit. All the machines that I use have electric. The older machines I have the PTO's are all fine on. They do have to have a low profile to clear the lever. The nuts on the back are jam nuts. They are about half as thick as a regular nut. So..... just make sure you get the right stuff.
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