OK - I love it when people follow up and "close out" a thread, not that I am closing this but I am posting what I believe will be helpful information for some. I finally got my sled all repaired and running nicely and there were several things causing this engine to continually blow. For one, I had a shot pto crank bearing which I think aided in wearing out the pto crank seal causing the pto piston to run lean. Fixed the bearing, new seals everywhere, etc.
After a few others said it looked like lack of oil I began to wonder about my oil pump so I took it off, hooked up my drill to it and held it at WOT and sure enough, pumped out oil nicely but when I put the pump back on and pulled it over, nothing came out. I also noticed that it went on rather easily, I figured the first time I had the flat shaft luckily lined up with the groove in the water pump shaft. As it turns out, my oil pump had not been spinning whatsoever, the tab shaft on the pump was worn down on both corners and was sitting, still, while the motor hummed away.
THANKS to a very generous person here on TY who sent me a pump for free, I have a fully functional machine again however I think I need to share pics as a lot of models used these pumps and I suspect they are prone to wearing down. I found several for sale on ebay and other internet parts houses with pictures and they were ALL WORN DOWN and useless.
The two pictures show the BAD PUMP with worn out corners, it will not spin and you will cook a motor. I actually bought a replacement pump from another user on these forums that was just like this, hope he will refund me wink wink. The GOOD PUMP has a nice full tab and you can actually see the wear markings a little bit where the shaft spins it.
Anyway, everyone on here has been extremely helpful and generous and I wanted to thank you all. Now, if we could just have a nice winter next year I can put more than 2.5 miles on this thing.