I don't know how the oil filter could have been in backwards unless the spring was missing, but having the filter in backwards just means the oil was circulating unfiltered.
As long as the oil was touching the dipstick, it had plenty of oil for starting the motor.
I would be more inclined to think the engine was rebuilt by a novice mechanic who may have installed a standard sized piston in an over-sized bore. It's one of the reasons I won't buy a used machine if the seller says he worked on it himself. And if he says he had work done to it, I want to know who did the work, what was done to it and why. I'm an asshole - I know it and I'm comfortable with it.
Minor oil leaks usually do not compromise engine integrity. As long as there was a seal on the shift shaft, it almost could not leak enough to cause engine damage as long as the oil was checked before the engine was run for any extended length of time./QUOTE]
The filter was definitley in backwards and the spring is there. Idk how that happens.
But I checked the amount of oil that came out and it is exactly 1/2 quart. I remember when I started it that the ex valve was getting oil, so you're probably right about there be being just enough. I pulled the belly pan and it is for sure leaking around the shift shaft. No big deal there. But, I don't what I should do about the all the racket? Should I pull the head and cylinder and check it out. Maybe measure the piston and cylinder? Hey what about where the pushrods ride on the cam? I know in a car engine they have hydraulic lifters than can be troublesome at times. Does this thing have something similar? Can I re-use the head gasket if I take it apart?