Problem solved! A friend who is a diesel mechanic came out and diagnosed it - the coughing was not accompanied by smoke, indicating it was "starved for fuel" - probably caused by gum buildup in the inlet ports of the injection pump. This engine does not have a low-pressure fuel supply, it's just gravity flow and the injector pump is above the bottom of the fuel tank, so it's sucking diesel. Any little restriction on the inlet side will result in insufficient fuel flow to support higher rpm. Solution: install an inline low-pressure fuel supply pump. Easy-peasy and now it runs like a top again!