When the mower pulls the cord from your hand, the carburator has a small explosion and there is a small amount of smoke coming out from the muffler is can be caused by three things:
1. The blade is loose.
2. The flywheel key is broken. To see if it is broken you need to remove the top cover, gas tank and recoil and the nut that holds the flywheel. From here you will be able to see the flywheel and the crankshift is lined up. If its moved a little bit the key is broken. Replace it. If everything is lined up here. Put everthing back together. You can buy a key at any sears hardware for about $2.
3. Next 7.0 hp is overhead valve. So you would need to remove the front valve cover, where the lifters are found. Check for a loose lifter.
Hope this helps solve your problem.