If it is hunting, it either has friction in the governor linkage, or lean mixture. Lean mixture would probably be either an intake air leak, or a carburetor fault. I suggest you begin by checking that the linkage moves freely and doesn't rub against anything, and post some pictures of it. I'd like to check that it doesn't have a stretched spring or other damaged parts, since it has reportedly been abused systematically by kids.
Once we are happy with the external governor bits, the next step would be to check the fuel flow to the carburetor, by checking whether it runs freely from the pipe when you disconnect it at the carburetor end. If there is no problem in that area, it will be time to remove the carburetor for examination and cleaning - which also gives you a chance to look at the insulator gaskets, and check that the clamped joints are clean and properly clamped. If there are no suspicious items in all that, next step will be to dismantle and clean the carburetor. The idea is to avoid dismantling things that might not need to be dismantled - start with the easiest things first.
