Most likely, the bolts holding the top part of the engine block to the sump (oil pan) have worked loose. B&S had a problem several years ago, with that same thing. Some said it was some of the engine aassemblers having union beefs with the company, although i don't know if it is true. It was hinted that the troubled assemblers purposly didn't torque the bolts, and they eventually came loose!
The fix? Buy a new sump gasket, and a crankshaft lower seal. Remove the engine, drain out the oil. turn engine upside down, remove the sump bolts, and the lower stack pulley. Slide the sump up and off. Clean any remaining gasket materials from the gasket seating area on block and sump. Carefully install the gasket on the block, and install the new crankshaft seal. Carefully lower the sump down over the crank-shaft, making sure the tab of the governor goes into its proper place, and the timing marks are rightly placed. Tighten the bolts tight. There are torque settings, but, not having them, i just tighten the bolts tight, and that works for me. Re-install engine.
Yeah, i know, the purists will yammer about my method of tightening the bolts, but TIGHT is TIGHT!

Hello, semi-purist here. If you are not reasonably experienced in "torquing" fasteners, or would call yourself a novice, I suggest you obtain a torque wrench. Rusty KNOWS what tight feels like, but he sometimes forgets that it is a talent that comes from years of experience (Big grin :^). Even if you "have the knack", it can vary from day to day, or even with the time of day (you don't want to hear that story). I also suggest that you go ahead and buy the service manual from Briggs. It is a small investment when factored against the prospect of always taking the machine to a pro shop. Not that I have anything against pro shops, I just always advise folks who think they might want to get into "the heavy stuff", to have all the "tools", including the OEM service manual.
Also, be sure to follow another of my standard suggestions (for all disassembly procedures of any/all components), TAKE LOTS OF PHOTOS of your disassembling in "step by step" fashion. Shoot from different angles so you capture every aspect of how items are fastened, routed, oriented, etc. Using a digital camera makes this a painless and cheap "diary" of the whole deal. Rusty's plan above will work. I'll add that any pulleys on the PTO end of crankshaft have to be removed before the sump can be removed. I have provided a link to the Briggs online IPL below. You can download a copy to your computer, it's PDF. The gasket for sump is item 12, Briggs part # 697227. You should also replace the crankshaft seal, item 20, Briggs # 690947. While the sump is removed from the crankcase, clean all rust from the exposed part of the crankshaft (everything that is outside of the seal contact point). Inspect this area of the crank for burrs or any other defect that might cut the new seal. There is also another thread currently active wherein another member is doing a similar gasket replacement. I'll post a link to that one. Just don't be deterred by the "thrashing" we gave happy123, he sort of set the stage for it and I'm not so sure he wasn't yanking our collective chains (now that I look back, I wonder).

Here is a link that might be useful: Briggs IPL for 446677

Link to get happy below.

Here is a link that might be useful: Who says this ain't fun?

Thanks for the thoughtful replies, rustyj14 and mownie! I really appreciate the help. Unfortunately, this sounds _way_ over my head, so I'm going to put it in the hands of a pro.

I am still curious about what caused the problem -- more likely that it was assembled improperly, or how it's been used? Also, how common is this? It seems like a big problem for an engine with only 220 hours on it. Should I stay away from B&S engines on my next mower?

Thanks again for your expertise!

***"Should I stay away from B&S engines on my next mower?"***
No. At least not if you think doing so will help you avoid this genre of problem! Consider this. Briggs & Stratton, and a handful of others, have literally built hundreds of millions of prime movers for all kinds of applications in their lifetime. Every engine maker has experienced a few problems of one type or another, nothing is ever perfect. To shun one particular brand because of a specific fault or failure, and choose another brand instead, will not guarantee that you will have NO PROBLEMS. It usually just means you will have OTHER problems, if the design of engine has some unique and proprietary designs or features. The gasket that is leaking on your Briggs engine is far from being unique or proprietary to Briggs. You could almost say the gasket position (sump to case) is nearly universal and you will find examples of it in every engine builder's "repertoire".
Rusty cited just one possibility for why a batch of engines may have developed a leaking sump gasket. But rumors abound as it cost nothing but a bit of one's time and imagination to create a rumor. Oh, I am not saying rusty "created" the rumor at all, and his story could be right on target (would not be the first time a group of disgruntled workers shot themselves in the foot to "spite" management). There are many reasons a particular gasket position on any OEM engine could fail. But the biggest factor to consider is: Of the multitude of engines ever built, you hear of the failures much more often than you hear of the successes.

Meant to include this: In recent years (say, around 20 to 25 years ago), metal casting processes have improved to the point that many cast alloy components can be made so precisely, the component is often able to go directly from the casting mold to the assembly line, with no machining to any surfaces. The surfaces of the component come directly out of the mold with a very smooth finish that is slick and glossy (compared to the rough castings of older machinery). Sometimes, these very smooth and "slippery" surfaces do not "grip" a gasket well enough to keep the gasket from moving in the open space between the bolts that hold the two mating "cases" together. Usually, the "first failure" gasket replacement clean-up procedure roughs up the slick finish enough to allow a good "bite" into the new gasket. But, I have encountered a few "difficult" or stubborn cases where the spacing between bolt holes was probably greater than it should have been (shortcoming of OEM design). The repeated failure of new gaskets (even after an initial roughing up of surfaces) begged that something else be done in addition to the micro roughing. For these troublesome cases, we were told (by factory service rep) to use an "automatic center punch" and make a series of "punch marks" on both mating halves of the cases between the bolt holes. His instructions were: Make a punch mark in the middle of the gasket surface, exactly halfway between two bolt holes, next, make another punch mark exactly halfway between the first punch mark and each of the bolt two bolt holes. This will result in the creation of three "gripping upsets" in the gasket profile. Repeat the procedure for all bolt hole positions on both halves of the mating cases.

Thanks for all the great info, Mownie! That helps a lot.

NOTE: I heard that info about the union troubles at briggs & Stratton, from one of the local mower repair shops. I also heard that the union workers purposely left the sump bolts un-torqued, and that eventually caused the leaks. Several engines that i replaced the sump gaskets on, had loose bolts in the sump area, so maybe they were left untorqued, or maybe just came loose. I was going on what i had been told.
Any way, i'm certainly glad that the engine in the story is going to be usable! Nice set of pictures!
Rusty J.

For anyone reading this I just worked on a freebie given to my dad. It had same leak running down by oil filter on to muffler. I just tightened sump bolts. No more leak. engine model ELS725 . 24 hp What have you got to loose. The guy that gave it to him said he was told it was not worth rebuilding. It did not need rebuilding.

it

While the main part of this thread is 7 years old, the point about loose bolts on the engine should be remembered. Several years ago I was having some problems with my JD LT155. When I inspected the engine I found that only one of the four bolts holding the engine to the frame were present. I replaced them and checking those bolts has become part of the Spring maintenance procedure ever since.

When you have these problems where you have to inspect under the tractor and other tight places, remember your digital camera (or cell phone). Take pictures of those inaccessible areas, can save you a couple of hours laying on the floor trying to find the problem