Hi Norm,
I've fixed a few mowers, mostly minor carby/pull-start/throttle/plug issues, so although it's frustrating I like the troubleshooting aspect and this is giving me a nice list to work off in the future

Also I'm planning on giving this mower to my brother, so I don't mind if the cost escalates a little, I get something out of it either way

My first thought is the previous owner probably hit something with the blade holder hard enough to possibly make the mower stop dead in its' tracks, which could have damaged the bearings. I haven't inspected the blade holder yet for such damage, just an initial thought.
I'll check the movement of the crankpin/blade assembly and let you know what I find.
I would be more inclined to say the crankpin would be OK because if it were bent, even with no compression I should have more issues getting the engine to fire and the plug to spark shouldn't I?
What I can try to do to test/observe this is spin the engine slowly (Even without disassembling it) and try to view the movement of the flywheel. If the flywheel gap isn't changing while spinning the engine from the blade plate (To try to avoid pressure on the bearings) and the plug out (No pressure from the top), the crankpin should be OK.
I confess I'm kinda excited to take one of these completely apart, I've never had to before. But considering I am, I'd like to get rid of the rust on the block and paint it haha. That's one thing I've never liked about the block, I hate looking at a rusty block/muffler (OCD, can't help it haha).
More updates to come!!