We still need pictures, while it is in pieces, and in stages when you reassemble it. Also, which model of K46 is it? There will be one or two letters after K46 in its identification number.
You said you have inspected the axles and hubs, and you don't have a broken axle or a sheared key or a stripped keyway in a hub (things which have been known to happen to K46s it seems).
If it didn't drive, but it was full of oil, and its hydraulic system was primed, something is broken. Unless the oil level was well below full, it can't have lost prime, because it had been working previously and the mower hadn't been turned upside down. (Fill means 1.85 litres of multigrade engine oil, reaching well up into the neck of the filler tube on top - initial fill is 10W-30, but they now recommend 5W-50 synthetic.) Note that on the K46 there is a single filler for the hydraulic system and the mechanical part of the transmission, but the two lots of identical fluid are kept separate inside the transmission. Did you find a total of nearly 2 litres of very light engine oil in the transmission?
You can get some information on the oil system here:
http://www.mytractorforum.com/showthread.php?t=161413You need to check the drive pulleys (both engine and top of transmission) and the belt of course. However a high speed, low torque drive doesn't usually emit a bang when it fails unless some part comes off and hits something. It is surprising how loud a broken V belt can be when it hits a guard or some other stationary part. Serious bangs, though, usually come from a high pressure seal or gasket blowing, or a geared-down part, probably the final drive area, fracturing. As it happens, I cannot see a high pressure seal or gasket in the hydraulic part of the K46, so a pressure failure does not seem a plausible cause.
The sudden failure is an important diagnostic feature, especially when combined with the oil not being discoloured, the main filter (the large round one under the hydraulic pump) not having metal swarf in it, and it having full drive capability immediately before the bang. Since there does not seem to be a high pressure pipe, hydraulic coupling or gasket in there, it seems like it must have been a mechanical failure. Incidentally the hydraulic part does not seem to have done much serious work, from your description of the state of the fluid and the main filter. You referred to just one magnet in the transmission: I believe there are actually three, one of them being just under the filler cap, and the others lower down inside the transmission.
Along with the suddenness of the drive failure, the accompanying bang is very important. If it were not for the bang, a simple loss of connection between the drive pedal and the tiltable swashplate inside the hydraulic pump would account for what happened. The disconnection could have been anywhere along the pedal linkage and the transmission's control linkage. However I can't imagine a linkage disconnection being accompanied by a bang (there might be a bit of a clunk perhaps, as the swashplate suddenly centered itself at zero pump output). I suggest that you carefully check the drive pedal linkage and the transmission linkage, ensuring that the swashplate is actually tilting when the pedal is moved.
I have only encountered exactly the symptoms reported in this case (sudden complete loss of drive accompanied by a bang) twice before, but in both instances the cause was exactly the same: a single tooth broken off the large final drive gear on the rear axle. It is interesting that this was Kori's diagnosis right at the beginning of this thread.
In reply to your question about turning one of the axles by hand, the final drive part of the transmission has a differential in its center. It is the differential that allows one axle to turn very easily, as long as the other axle is able to turn in the opposite direction by rotating the differential's planet gears. If you hold the other axle, or turn it in the same direction as the one you were turning in the first place, the whole final drive has to turn over and there will be a little more resistance. Aside from visual inspection of the parts, you can't learn about the condition of the transmission except by making the final drive turn over. When it turns, if nothing is broken it will rotate the whole gear train smoothly, right back to the hydraulic motor part of the central hydraulic unit. If a tooth is missing from the axle's final drive gear, the rest of the transmission will turn intermittently due to the gap in the large gear on the axle.
This unit, like most small hydrostatic units, has a multi-cylinder hydraulic pump with a vertical axis, driven by the input shaft. The oil pumped flows directly into a multi-cylinder hydraulic motor with a horizontal axis, driving a shaft with a small pinion on the end of it. The connections between the pump and the motor are completely internal to the single aluminium casting on which both the pump and the motor are mounted. Internal oil leakage does occur due to wear on the port-plates at the ends of the pump and motor cylinders, but this is something that happens gradually and is normally associated with high-temperature degradation (i.e. oxidation) of the hydraulic oil - the oxidised material in the degraded oil is abrasive. In my experience, oxidised oil is always brown and has a distinctive odour. You have reported that in this transmission the oil is in good condition, and the transmission has not been progressively losing speed or gradability.
When you test the gears by rotating the axle be sure the gears have some oil on them, and especially, be sure there is a bit of light engine oil in the hydraulic motor part to ensure it does not scuff or seize. Of course the transit bypass must be pushed in to allow the motor to rotate.
Please post the pictures, and let's talk about what is going on step by step through the gear train.
