Hi there roverdude45,
Well it seems like you have what we call a flogged out clutch half which has also added a bit of premature wear on the clutch lining and the plastic thrust pad.
First things first and that is undo the 3 bolts that hold the clutch halves together and then remove the 4 mounting bolts that secure the engine to the chassis. Once this has been done inspect the clutch cork as it should have around 1.5 mm of cork thickness, but I feel that it will be much thinner than that and if that's the case I would organise a new lining and a the engine side clutch body at the same time.
Before you order any parts can you please remove the clutch half from the engines PTO shaft. One thing I feel might be an issue and that is the key steel that is meant to stop the shaft rotating inside the clutch half and create positive drive.
I'm bringing this up as you mentioned about seeing the shaft spin inside the clutch half and I'm starting to wonder if a previous tenant or lawnmower shop has had the engine off and forgotten to reinsert the key steel and just used the two set screws as a way of locking up the clutch onto shaft.
Once you get these major components apart and post some pictures up of them, I'll then be able to give you some further advise.
Must admit I'm very much looking forward to seeing the photos.
Cheers,
BB
PS. While I remember can you please once you've removed the engine, clean the chassis rails and take some good close up photos of around the engine mounting holes.
