I resolved the rough running thanks to those who guided me to really scrutinize the ignition system in this tractor. I bought a new spark checker, the adjustable type and sure enough the spark was intermittent at each cylinder. I decided to buy a new set of points and condenser and sure enough this cured the problem. She starts and runs smoothly and idles down to the 600 rpm nicely.
I do not see oil coming from the exhaust pipe any more - I think this was due to the engine not firing. What I do have now is that she smokes a lot when running at above idle rpm. I don't see much smoke at idle. When I throttle up theres a lot of blue smoke. I pulled the head again to go through the valve train which I did not look at before. When I pulled the head #3 and #4 had black oil in the compression chamber. The valves all seem ok, but need lapping. The stems are 1/2 thousanth under spec ( .341 as opposed to .3415) the bore was .344-.345 across the board. Spec calls for .001-.002 clearance on the intakes so I am out of spec by .001-.002. Could this result in the smoke? The seals were very hard but intact. I have new seals from my gasket kit. Compression is over spec in all cylinders I have 165psi, 170, 165, 180. Any thoughts?