I agree with AVB. You can make a flat plate puller, or buy a harmonic balancer puller. There are three cored holes in the flywheel near the center, for the puller screws.
I'd just file a 45 degree chamfer about 1-2 mm across on the end of the burred/bellmouthed thread on the end of the crankshaft. You should then be able to screw the nut onto the thread normally.
A replacement muffler in better condition is the most practical solution for the fairly huge crack you have there. If it were a vintage car part, and therefore irreplaceable, I'd oxy-weld it to form a bead of steel weld rod right around that flange at the corner that has cracked, building up the thickness to about 3 mm in the process. There doesn't seem much chance of MIG welding it, since there isn't much metal left, and what there is has been damaged by metal fatigue.
Have you considered getting another old full-crank Victa 2 stroke engine from a tip shop or abandoned on a nature strip? The rest of the mower doesn't need to be in usable condition of course. Otherwise you may find the cost of a piston and rings will make your project uneconomic. Don't attempt to use piston rings that have been used previously in another engine - they will not usually bed in satisfactorily. You can hand-polish the bore of your cylinder with emery cloth or wet-and-dry abrasive sheet so long as it is 400 grit or finer. Clean the whole cylinder casting properly after you've worked on the bore - you must not allow any trace of abrasive to end up inside the engine.
