I bought two used flywheels and got the correct B&S keys. After reading additional forums, I realized what the problem was. The main problem was that I did not tighten the flywheel bolt enough which would cause the flywheel to slip. If I had the B&S key, it would have just sheared. Because I used a steel key, it cracked the flywheel. I was mistakenly under the impression that it was the key that keep the flywheel in alignment with the shaft. But it is the torque of the bolt that pulls the flywheel against the tapered shaft that holds the flywheel in place.
After installing the replacement flywheel and key on one mower, I torqued the bolt to 55 foot pounds. The mower started right up and ran correctly. I then did the same to the mower with the engine I just rebuilt and that one started and ran also. I stopped and started that engine twice and on the third time the engine would not start. The engine was locked up.
I removed the engine and started taking it apart. I removed some parts so that all I had left was the crankshaft and piston and it was still locked. I removed the bolts from the bottom of the rod and now the crank would rotate and the piston would move. The cylinder sleeve is smooth as can be. So it appears that something was just binding. I reassembled the engine but when I start to tighten the bottom case, I cannot turn the flywheel anymore.
Any ideas???