Well...pulled down the engine yesterday and made a few discoveries.
Whoever have done the job of repowering the mower did an 'average' job. It was clear that the drive shaft had no had grease or anti-sieze applied to it before installing the clutch, so the engine side of the clutch housing was well and truly stuck to it.
Being made of allow, it meant great care had to be take not to crack or break it. Copious amounts of Inox was applied and left to soak with no change - she was stuck fast. We heated up the housing with map gas and put a clutch puller on and with a very careful combination of applying some load via the puller and then tapping the housing along the shaft with a block and hammer, we got it off millimeter by millimeter. The better part of an hour later, we had it off unharmed.
Needless to say, the oil seal got fried, but a spare was luckily obtained out of a small box of Honda odds and ends from the Stihl dealer that backs onto my mates workshop. There was an amount of surface corrosion on the shaft that prevented removal of the side cover of the engine because the crank case bearing could not get past the rust. We carefully sanded this off with some emery tape, which of course trashed the crank case bearing - it is open bearing. I'll source a new bearing today - the mower shop and Repco up the road had the right bearing, but only in a sealed bearing. We'll be sure to linish the shaft well and reassemble it with anti-sieze to make life easier in the future.
The piston was fine, but the bore was well glazed. One look at the rings and we knew they were stuffed - we didn't realize stuffed they were till we checked the end gap with them in the bore - the service limit on all 3 is 1mm. The oil ring was 2.73mm, the top ring was 3.42mm and we gave up on measuring the second ring at 5mm!
On to the head, the valves had large amounts of build up on them...clearly a result of excess oil in the chamber. The exhaust valve also had evidence of oil coming through from the valve guide as well. With the rockers and valve srings out of the way, the intake valve felt very good, but the exhaust valve had significant excess lateral movement - this proved that oil was getting down the exhaust valve guide, which would have been exacerbating the smoking issue.
Valves guides are not a listed replaceable component in this engine, although guides can be bought for them at $7.60 USD, but then you have to fit and ream them to suit your valves. At this point, things are not looking so good. A quick look on eBay brought up a few cylinder heads for the GX160 - the GX160 is a very popular go kart engine in the USA, so parts are very readily available over there.
http://cgi.ebay.com/Honda-Replaceme...t=LH_DefaultDomain_0&hash=item3caf732dd4This one looked to be the best one out of what was available and meant a totally new top end for the engine. For the $$$, it was worth a go. Even if it turns out to be average quality and I go through one every 18 months to 2 years, I would consider it an acceptable price and a consumable component. I should have it landed here by Friday with any luck.
I forgot to take my camera on Sunday, so I don't have pics of the valves before we started cleaning them, but I will take it when I go back to finish the rebuild and take photos of the new and old rings in the bore so you can see the massive difference.
On the topic of rings, the new oil ring I have a is a 3 piece job, whereas the original is a 1 piece. Does this matter? The rings are made by NPR, who are the manufacturer or all OEM rings for all Honda engines. Maybe they just changed was is fitted over the years?
Before we put the engine back together, all of the components (block, crank, etc) will be put through this industrial parts washing machine he has at his workshop - dirty parts go in and come out looking like new.

Everything had the hallmarks of a lack of knwoledge/care/maintenance - I went through similar things when I was restoring a 1963 Morris Mini - you just don't REALLY know what you have till you completely pull it apart.
Ben.
