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how can it be repaired

There is typically a replaceable seal where the shaft exits the block. Replace it . . .

The HH60 did not have a seal. Are you telling us that oil is coming out of the hole which is drilled vertically into the crankshaft PTO side housing. The governor shaft would come through this hole and the oil would be flowing uphill. If that is the case, I suspect that the breather may be plugged, causing an increase in crankcase pressure and forcing oil out of any opening available. If you post back, please include the engine spec number so we can see the exact engine you have. In the mean time, here is a manual which may help you. https://www.mymowerparts.com/pdf/Te...P-4-CYCLE-L-HEAD-FLAT-HEAD-ENGINES-692509.pdf

I have this same problem. I have this engine Tecumseh OHH60-71217F aka OHH4565 sitting on top of this tiller MTD 21A-333A729. The governor is horizontal. I bought it used and have been tuning it up. There was a ton of caked on oil on the governor's side of the engine. After thoroughly degreasing, the source of the oil appears to be from the governor shaft exiting the crankcase. There is a possibility there is too much oil in the crankcase. I have yet to drain it. If oil is coming from the shaft is there anything I can do about it? From the exploded diagrams of the engine there does not appear to be a seal of any kind.

If the governor hole is worn drilling and fitting a bushing is an option but check for plugged breather or excessive blow-by first.

My breather has a port coming off the valve cover with a tube exposed to the air and dangling along side the engine. Is that how the breather tube is supposed to be routed on these engines? The tube did have a severe kink in it and I have replaced it. I'll be checking compression next.

On the older Tecumseh engines the breather tube is not connected to anything.

Good news. The tiller is tuned up and running great now. This tiller had been sitting for years. I pulled the carb knowing it would need to be cleaned. Luckily it is the factory carb. I want to clean it with an ultrasonic cleaner. Until I can get an ultrasonic cleaner, I bought an aftermarket carb on amazon for $20 bucks. I installed it and it works perfectly. The only thing I need now is a new governor spring. The original governor spring is completely trashed and I have it shortened in such a way to get me along until the new one arrives. I have it on order. The only thing I really need to do now it sharpen the blades. Thank you for everyone's advice.

A little oil weeping around the governor shaft is normal, a lot suggests a plugged breather or excessive blowby due to worn rings, valves etc. Sharpening the tines will be a challenge, they will be high quality spring steel.

I sharpened the blades with an 80 grit flap disc on my angle grinder. It looks like I got the angles pretty well.

So the tiller appears to not be leaking oil. I miss routed the belt and mistook its dark shavings for oil until I took the belt guard off and found out what happened. A new belt is in my future.