I'm working on a LX277 with a twin cylinder FH500V, 17 hp air cooled. It did not have a starter. I bought a starter and installed it and noticed the flywheel teeth were resting on the starter teeth, they couldn't disengage. This is a side mount starter, not a top mount so the there was no way that it was just a spacing issue, the bolt pattern for the starter was fixed. I started the engine and it ran nice and smooth, no smoke at all. The starter could not disengage so it grinded like all heck so I had to stop the engine after only 3 or 4 seconds. The flywheel rests on the cone shaped top of the crankshaft so there was no spacing that either. I notice some up and down play in the crankshaft, A LOT of up and down play. I could raise the crankshaft a full 5mm (about 1/4"). With the crankshaft raised the flywheel easily cleared the teeth of the starter.
Obviously I am thinking the worst. How else could the crankshaft have dropped that much unless it has worn down into the bottom bearing of the short block? There was no metal in the oil when I changed it. The engine turns over and spins very smoothly. Very good compression. No oil leaks at all, not from the top or bottom oil seals or anywhere else. How could the connecting rods not get in a bind with the shaft moving that much? Is there a simple explanation to this that I have overlooked or do I have to take the engine off, open it up and inspect it?