Maybe it will eventually shell out. Head removal would be next.
I suspect lower cylinder or ex valve area.
May run a long time on a tiller.
Good to hear that someone else gets to work on junk. Had a guy that seemed like all he ever brought me was junk (and I told him so) even though I refused to work on his junk. Last time I seen him I replaced his tiller motor with another engine for $150 and told him he had better take care of the gear box (oil and grease) because it's vintage and NLA) and have not seen him again. (and I told him if he wants a warranty to go buy new)