I would first say, that is not the original motor for that tractor. Tractor is a '68 or 69, Sears didn't start using the overhead valve motors until '73 I believe at the earliest. Someone butched up your side of the grill also as the cut it out for the motor to fit in.
Look down on the corner of the motor near were it bolts to frame under carb/front flywheel area and see what number is stamped, that will tell you if it truly is a 12 Hp. I think it came from another brand myself due to color and how gas tank is mounted. Actually looking at pics again with the gas tank mounted to engine and the voltage regulator in the flywheel, it definitely came from something else, maybe generator ( usually tapered shafts though) or the factory replacements came like that also.
You can put in about any brand if you are willing to modify both structurally and wiring. kohler, Briggs, single cyl diesel, even the Predator motors from Harbor Freight. All depends on what your flavor is and you skill to do it. The stock pulleys are 1 1/8" I believe so if you want to try to keep those, you will need same crank to match.
I would try to pour some Marvel mystery oil down cyl and in gas tank and run it for a bit and see if it clears up any.
Edited by TAHOE, October 28, 2013 - 11:12 AM.