Welcome to the club Dave.
Short answer, after 35 plus years of running, a complete overhaul isn't out of the question. You'll just have to check the specs and see what you have. In my case, a bad head gasket along with carbon build up (need to de-carbonize every now and then) chewed up the piston. It ran well, but smoked bad. All that was needed in my case was a new piston/rod/hone/cleaned up the valves...good to go.
Pull the head and see what it looks like. Stick with the 12hp kohler...do what you gotta do and it will go another 35 plus years. You'll love the new found torque.
Good luck
metalrain
in case you don't know...200 dollars will buy you a good set of cub wheel weights and a set of chains....nice score.