IIRC, when I was recently troubleshooting my Deuce's air system, the TM said that to increase the air pressure the small screw should be adjusted outwards. But I also recall the TM saying that for pressures as low as yours, to replace the air governor. I bought mine new at NAPA for $11. I just saw some on eBay for around $20. Most likely the O-ring in your governor air piston needs replacing, and/or the corrosion and gunk have built up inside to the point where the piston cannot move to adjust air pressure anymore. It's easier to replace the whole thing, as I haven't found any documentation on how to disassemble/reassemble it.
While you're at it, you might want to remove the large hex-head bolt on top of your air compressor and clean out the vent for the unloader/governor. I used a 1-1/16" open-end wrench to remove it, underneath you'll find a machined port for a vertical valve with an O-ring & a spring. I inspected & lubed mine with silicone grease, cleaned out a bunch of gunk buildup, and cleaned the small port for the unloader/governor air line with a pipe cleaner. My compressor works even better now.
And don't forget to have a good look at your compressor's intake as well; the reeds in the air cleaner often get clogged and need cleaning/replacement. I dumped mine, installed a 1/2" pipe nipple, and ran 3/4" hose to a tapped 1/2" pipe nipple on the air cleaner for dry, clean, filtered air for my MF compressor.
