newb question: hard to re-engine a 127?
 

There is an engine-less 127 in good shape locally for $100. Hydrostatic reportedly works well.

Can I source just about any Kohler K-xxx 12 HP engine and bolt it in or do I need something proprietary?

You need a Cub-spec K-series Kohler, as the block is different from most other spec engines (denoted by the "A" in "K301A" for instance). They're fairly plentiful if you look around.

I suspected as much, good info on the "A", thanks!