I finally got back to this engine (life kept intruding).

Jon Elson wrote:
No, these small differences in valve clearance will not prevent it
from running.

Great, I didn't want to fool around with them any more.

... Does this have electronic (breaker less) ignition,
or is there a set of points buried under a cover under the flywheel?

It had points, then was converted to breaker less. The points are still
there & the wires cut.

Hmmmm, funny it had the kickback when the flywheel was out of time.
That indicates the spark was adequate then. ...

Maybe "kickback" wasn't the right term. 'Cause there wasn't ignition, I
think. What happened was, as I was pulling the start cord, there was a
very abrupt & solid stop. So much so that I hurt my rotator cuff, not
seriously, though.

I just occurred to me that maybe that was what sheared the flywheel key.
In fact, I just looked and it's sheared again! WTF?

Lloyd E. Sponenburgh wrote:
....
Since (DAMHIKT) the points gap can shear a key, I'd be looking at that.
....

That's a new one for me. It does have the old points there, even though
they aren't used. Is it the plunger that does it? It fits, though,
'cause the key has sheared again.

Thanks,
Bob