Your putting me on the spot. If you brought it to me and asked me that question, here's what I would do. I would ask you to take it off the tractor, saves half hour of labor. Bring the engine to me and ask for a qoute to repair, spent the money to have a mechanic look at it. If it is less than $400, I would repair. That's assuming the rest of the tractor is in good condition. You can't buy a new engine for that price. Find the best rebuilder in your area, a lot of guys say they rebuild, but just throw parts at it, plus one that is a Kohler warranty center. Personally, I would start with the shop that has been around for at least ten years. You want the mechanic to check the cylinder, valves, crank diameter, rod, everything. Doing this, he will be able to give you the best quote, to see if it is really worth it. Talk to the mechanic and/or owner before doing this and see what they have to say, so you don't surprise them. Some places don't like to do rebuilds and quotes. Remember, this just my opinion, as I can't see the unit.