I agree with bigted's troubleshooting (it will nearly certainly pinpoint the problem), but have a caveat regarding the oil - I have know some of these cheaper oils to really shear down quickly. 15w40 is a very shear resistant oil, but still possible.
Presumably, the neighbour has had it 3 or 4 months, so maybe around 8-10 hours run time (that would be how much I would have put on it anyway if I were using it every fortnight/) which could see it shear - especially if run hard/the cooling fins are blocked.
I would personally tip it out, keep it (because its probably fine), and put some more KMX in. If it stops, you know its shearing too quickly.
Also, didn't know Kmart KMX was made in 15w40 - only ever seen 20w50 - learn something new everyday
