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Was out mowing my lawn and I heard knocking, like the engine was clogged. Turned the engine off and saw smoke and noticed oil leaking out. I found a crack in back of the engine block.

Any idea what would cause this?

Counterbalance weight retaining arm broke allowing the weight to get off center and pushing out the back of the block.

You aren'y the first one. Do a search of, " Kohler Courage cracked engine block."

IT would be the second most common failure of all small engines after oil starvation seizures
Got a Loncin, 5 x B & S & one Kohler all with counterweights through the cases this year waiting to be stripped for parts , which is about average