It can be increased. You need to turn the gov. screw counter-clockwise. (out)
The way it was explained to me was.....
Pick a gear, (2nd works good) and nail it WOT. Watch your tach closely as it climbs. When you feel the "pull" of the engine start to let off make note of your RPM. At that point your starting to approach your 'governed' speed. Commonly its around 2450-2550 RPM. If you turn your gov. screw out about 2 turns and try again you should see an increase in that threshold.
I found that once I feel the 'pulling' start to drop off, there was still a bit more RPM to come yet, but it was reducing in strength.
Its my understanding that our 1st Gen's are ok to go to 3000 RPM
Right now mine is about 2725 RPM at the drop off point. I'm going to go up a tiny bit more, perhaps to about 2900 RPM but no more.
Thats just my personal feeling though.
Another thing to keep in mind is at that point you are well past your peak torque range, although the auto trans like those RPMs better.
I am eagerly hoping someone else will chime in on this to make sure that I've understood this properly as well Old Smokey, but it does seem to result in the described "cause and effect" as I understood it.
Do you know were the gov. adj. screw is?
If not let me know and I'll try to post a pic that will help.
good luck,
Bob