Well, let’s attack one problem at a time. Try removing the plugs, squirting some fuel/oil mix in the plug holes, then starting cold. Perhaps the choke mechanism isn’t working properly. Like I said, try advancing the throttle past the “start” position also, but be prepared to lower the throttle quickly.
I really don’t think this is an issue with the upper/lower crankcase seals. There is not actual upper crankcase seal. The lower seal is often misassembled messed up on these engines but I really don’t think that will cause a hard starting issue.
Again, try to stick with the basics here, avoid “digging too deep” looking for more complex issues that don’t exist.
Do the compression test like Frank advises, you will probably only see around 70PSI, which is normal for these engines.
Did you drain/inspect the gear lube??
Have you done a cranking spark test? This ignition system should be able to jump a 1/4″ gap while cranking.
