I just bought a non-contact RPM meter. From where should I measure the RPM. I'm planning to attach one of the strips on the PTO pulley and run it unloaded. Do i test it unloaded or loaded with a blower?
Did you let it run 10-15 minutes so everything has come up to temp? If you have not, that is what needs to happen. It is in the TM1590 and CTM2 and a Onan engine operators manual. If it is up to temp, then I would check the engine diagnosis chart in the manual for places to start checking items. because it can be anything form the ignition to valves, compression (ring issues), to carb and manifold issues.
It can be simply a worn governor hole, solved by moving the throttle cable mount an equal amount, or moving one hole further out on the spring. Both are not perfect, but they are well tested work around.
Steppin, Don't go looking for trouble!! At your 3214 WOT rpm, the tape is passing by the meter 53 times a second! Your fluctuation can easily be an error in the rpm meter or you're moving the meter....slightly is all it takes!... With your grille off, you should be able to hold the meter steady... and prolly still get minor fluctuations. If you can audibly hear your engine changing rpm, that's one thing. But if you see 20 rpm change of the meter, don't worry about it.
As a side note, check rpm unloaded first, then apply a load. This will tell you if the governor is working correctly. But even with a load, I would expect rpm to be (maybe??) 50-100 lower at WOT.
I hope this puts your mind at ease and you don't dig into carb, governor, whatever, and $300 later you (kinda) have a steady 3450 rpm. Bob