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I turn the key, there is a loud clunk, and the starter does not turn. The battery is good. I bypassed the starter solenoid and the same thing happens. I've checked the spark plug and it's getting fuel. The machine (a 17.5 hp unit) has less than thirty hours on it. When I removed the spark plug and briefly turned the ignition on, the engine turned over and spewed out some not so good looking gasoline.

Need the engine model # - on a shroud or valve cover.
Sounds hydrolocked. Gas seeped out of carb into crankcase. Oil probably is gas laden. Check oil level - may be overfilled. Need to drain/change oil before running. May need a fuel shutoff valve before carb.

Thanks dougand3. Oil is right on the mark and does not smell of gasoline. Can it still be hydrolock? Could it be a stuck float in the carburetor?

Could be, give us the engine make and model number,

Scrubcadet10 - It does have gas in it. The tank is 3/4 full and it kicks out gasoline if you crank it without the spark plug in place.

yep, sounds like a carb issue to me. keep an eye on your oil level out of caution.