Just wrapped up the instalation and all is well. I ended up getting the short block (long block because it included the head?) and crankshaft to fit my application. I had to use my original side cover even though both engines list he same part number for the cover, the only difference is the dipstick location which would have been behind the heater box on a Snow King application. I also used the flywheel with ring gear and generator for the light along with carb, exhaust, starter etc.
Started first pull and runs great, too bad we didn't get the 25 cm (10 inches) of snow we were forecast to get on Friday.
As for the old engine, no signs of any trouble with the connecting rod or crankshaft, still looked perfect. The cam and lifters also look fine. I haven't taken the head of to look at the piston or valves yet. I regret not taking a video of the old engine running, maybe some of you would have pick up on what the noise was.
In the end it was $90 for the short block, $110 for the crankshaft and $18 for the gasket set, pretty inexpensive repair in the end, not counting my time.
Thanks for the help guys!