You should replace the ign cly soon. Once it locks up for good its gonna cost 3x as much to replace it. So for a little peace of mind do it now. A local locksmith can get you a new cly and key it to your keys (you keep your originals) and it should cost you $100 or less.
As for the surging if the PVC hose feels soft chances are its collapsing when you get into the higher RPM. Not sure what the part number is for it, but its possible that is your problem.
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