Because it got worse over time, I would suspect a speed sensor problem. I worked on an older 65 that had a magnetic pickup that screwed into the bell housing and picked up a reluctance signal from the teeth on the flywheel. It could be the gap is wrong or the wiring is failing. The signal isn't very strong to begin with, so corrosion, moisture or loose terminals can easily make it unreadable.
Does the unit have a RPM readout ? Do the numbers make sense ? 700 - 900 at Idle ? 2600 - 2700 at full throttle with no load ? If you are seeing these kind of numbers and they are stable at steady engine speeds then the speed sensor is probably OK.
AutoFeed systems work by comparing the current rpm to a threashold or trigger rpm. If things are turning above the trigger rpm then the AF does nothing. Once the rpm drops to or below the trigger speed, indicating the chipper is being overloaded, then the AF control unit sends a signal to some sort of electric control that stops feeding wood into the chipper. No wood feed takes the load off the chipper and the rpm climbs. Once it gets back above a trigger speed the AF control unit signals to start feeding wood again.
More capable systems will reverse the feed for a short time to get the load off the chipper faster. On some systems the speed to stop feeding is different than the start feeding rpm so as to allow the chipper to gain more speed before the feed starts again. Some systems are factory set only and some can be custom programmed by the user. Most AF control units have some sort of indicating system to show when it has sent the signal to stop the feed and a different indication that it has started the feed again. Your manual should tell you how to tell which is which.
Now to trouble shoot the system..... Note: NO wood required.
Start the chipper and allow it to warm up at Idle, turn on Autofeed, the feed system should not be working, increase RPM till AF control unit signals it has started to feed. See if feed is working.
If feed is working OK, slowly decrease RPM till AF control unit signals it has stopped the feed system. Verify the feed has stopped.
Increase RPM again till AF control unit indicated it has restarted the feed system.
Verify feed is working.
If the AF control system doesn't signal the feed system to engage in the first test, try to engage it after engine reaches full RPM. If it still doesn't indicate it is trying to engage the feed system then suspect faulty RPM sensor or possibly the engage RPM is set higher than the engine will run.
If the AF control system indicates it has engaged the feed system, but the system isn't working then suspect the electric control valve or the wires running to it.
If the AF control system indicates it has stopped the feed system, but the feed is still working then suspect the control valve. A test light can quickly verify voltage to the valve changes with AF control system indications.
I'm trying to write this as general as possible to cover the different kinds of systems. That older 65 I worked on had a chip in the AF control unit that held a 'divisor' number the unit used to convert pulses from the speed sensor to RPM's. The chip would go bad and indicate a divisor of 1 or 0 ( not sure which ) but the AF control unit thought the engine was turning like many times the real speed. All the rpms were factory set, so the control unit never saw the RPMs drop enough to stop the feed. The only option was to replace the whole control unit. They were like $600 or so in cost and still had the defective chip design, so was likely to fail again.
Rick