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Do you have a serial number on this engine? I could be a non working compression release. If that is the case it might have also broken the exhaust valve keeper which could explain why it just quit running. It could be the flywheel key as darryl suggested. That would explain the engine quitting but not why it won't turn over. As for the gear on the crankshaft turning that can't happen on the Courage. It can on the Command but this Courage single has a keyed gear and plastic cam gears.
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