I have a Craftsman 16hp B&S, 42 tractor. engine surges, blows oil

I have a Craftsman 16hp B&S, 42 tractor. model 917.270680. Last week when I started it, it ran rough, and wouldn't speed up. I engaged the blades and the engine ran rougher and slower until it conked out. It would not restart. I checked the oil and it had the vicosity of water and smelled of gas. Took off the air filter and there was gas/oil in the bottom of the filter housing. Put on a new carburator (and fresh oil)- it started immediately, but then it started surging up and down and the govenor lever cylcled back and forth searching for a steady state. The crankcase ventilation tube is pushing out a lot of oil & air into the filter housing-even after 15-30 seconds. Also have occasional backfires up the carb and out the exhaust. Smokes at time. What is my next step? Do I have a broken piston ring? I have not checked the compression or the adjustment of the govenor.