Yes the flywheel is cracked there, at the key point. I got this mower from a 'guy' who seemed to know about two strokes. But as i have had to replace all these parts, i'm not so sure. Think i will be paying him a visit... I'm not sure about the o-ring under the starter, i would have to take the starter bits off, which i didn't want to do. I replace the one where the carby joins the engine, and the one for the back plate of the carb with the primer bulb.

The belt: its a 24inch cut, and its belt drive. From the engine to the blades: 2:1 reduction.
I think the flywheel is cracked from over tightening, but unless its tight the cup slides around on top of the flywheel. Is there a torque setting for this joint?
Well ill see if i can find an old flywheel... But im starting to see the attraction of a new four stroke...