312 motor problem?

So i picked up a 312 yesterday. I didnt need it, but it was cheap, in good shape body wise, little to no rust. Small home made wheel weights and a brush guard. That pins on and off just like a normal attachment for the front of a 3xx series. I got it loaded in the trailer using the not finished 318 and after I moved the 78 sears ss10 and the cab and blower, got it home and started looking.

It will turn part way over by hand, then clunk and stop dead. It will roll over back the other way and same thing. This is just my hands on the driveshaft. No tools or anything else. It feels like it is coming from the engine, not the hydrostat. Im guessing a dropped valve? It doesnt feel like it has compression but I pulled the spark plug and stuck a screw driver in and it moves when rolling by hand.

Is this thing worth fixing to use as a mower? It has the 38" deck on it. No front hydros but has 1 lever for raising the deck so Im guessing they could be added if I wanted, maybe at least 1 rear and 1 front set to use a 2 way blade or raise and lower a dump trailer I still havnt had time to start on.......

What is common in the k301? Is it worth repowering? or maybe just a used motor? I will try to get a pic up tonight, and when i say cheap, it was $50 bucks, so i think its at least worth looking into.