why do they think the flywheel key is sheared?
Sheared flywheel key symptoms:
The symptoms of a sheared flywheel key range widely from a barely noticeable misfire to a no-start condition. In between these extremes the engine may misfire noticeably, run rough, backfire, be difficult to restart hot, or lack power. Advanced timing can cause engine overheating. A muffler glowing cherry red probably indicates ******ed timing. These variations depend on just how far the flywheel has spun out of time and in which direction. The key may have only partially sheared, or the flywheel may have advanced a half a revolution. If the sparks occurs during the compression stroke, the engine will backfire, and the crankshaft will reverse direction violently. If the operator was pulling the recoil starter, the starter rope would be pulled back sharply, along with the operator's arm. This is a common and painful occurrence, and a sure sign of a sheared flywheel key.
I'd want to verify that the "glowing red" condition is really happening all the time, or if that was just one case that you had from running it at 1/2 throttle too long and it being dark so you could see it.