Time to rebuild the engine. The crank is probably messed-up to.

Before you have this mower "put to sleep" i recomend you check over the basics. The oil seal could fail due to age/wear or blade that is way off balance. This part is very simple to replace and very common part any repair store should have a bag of these seals on their parts shelf. As far as the bearing see if the crankshaft has excess side play when you move the blade side to side. Griding sound and running slow sounds like a govenor issue more then block wear. first check the govenor rod liknage to the carb assembly. I have seen a few times where this lever and rod flip too far in the up positon and bind preveting the lever from adjusting when the engine starts. Make sure this lever moves free. Also when the engine starts try manually pushing the linkage and shaft upward and the engine should rev up. If the lever and shaft does not respond check the exhaust ports under the deck and muffer for blockage. Also pull off the engine cover and flywheel to check for damanged or bidning govenor due to wear or lack of grease. I have collected many old lawn boys from people assuming it was retirement time when basic troubleshooting and $20 or less in parts makes the mower dependable as new

Eric

Eric::Great response, The shaft does move side to side I would say by 1/16th of an inch. 2-Questions Can the seal be replaced from the buttom of the engine like other B&S engines and it does seem that the lower bearing is shot will I have to take the engine apart to replace the bearing.

I would not worry about 1/16 inch. I have seen these work fine with more play then that. The seal is fairly easy to replace. If you dont have the seal removal tool in the tool kit best thing to do is remove the engine from deck. remove the blade, blade adaptor, muffler and then inside the muffler area you will see the 3 bolts that hold the engine to the plate. Remove the engine and pry the old seal out with very small screwdriver. The bearing will be in plain view when you remove the seal however it is built into the engine block and non replaceable. When intstalling the new seal first clean the crankshaft of rust and dirt with wd40 and sandpaper so the debris wont be pulled down with the new seal. The seal needs to be countersunk below the mounting piece. Use a flat head screwdriver place with blade on angle so you dont punch into the seal and press the seal in firmly on both sides. While the engine is off the deck open the carb bowl and check the main jet for blockage. By the way you may need a new exhaust seal if it tears when removing the engine and may need new blade adaptor if it bends when removing. Also regurdless of what anyone says i never recomend using a mulch cover on any d series engine including this one since mulching makes the engine work harder then designed and will accerate wear on this bearing. Let us know what you come up with

I will give it a try if the seal does not fix, then out with the 2-cycle engine. I will clean and repaint the body and install a 3.5-HP B&S or Tec engine, it makes a great light yet powerfull lawnmower.