17 HP kohler with broken rod. Worth rebuilding??

Just what do you have to lose? Go for it. The build up on the crankshaft would be my main concern. Never had very good luck with crankshafts. I have seen some good size chunks out of the lower cylinder wall and still going. Just make sure you clean everything and get out all the metal fillings.
 
If there was a possibility that the connecting rod broke due to oil starvation in the past, there is a possibility of excessive wear in the top or bottom main bearing. If it has an electric clutch, wear in either of the main bearings can cause the required air gap in the electric clutch to diminish and the result can cause damage to the electric clutch. Also engines that use an electric clutch usually have more thrust loading between the crankshaft and the main bearings. In an unrelated note, a few years ago, there was an issue when a major electric clutch manufacturer shipped some OEM's some defective clutches with an electrical short through the crankshaft, caused the top main bearings to melt after only a few hours of running.
 
In the long run most likely the better alternative.
If you check evilbay / caigs list you will see that parted out you should get in the order of $ 200 to $ 400 for the Kohler parts, starter, carb, flywheel , alternator, head & crank then $ 2,00 scrap for the short block.
 
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