It would shock me if you could buy a brand new short block for less than 1000 dollars....anywhere. if your tractor came with a K engine in it, then it is OLD. So why would you want to put that kind of money into it?
IMO, a wiser move would be to find the SPEC number of your engine and determine from that as to what makes your engine unique for use in a Sears. Things such as oil pans, choice of starter, charging system amperage and most importantly....the diameter and length of the output shaft of the crank.
With that knowledge, I would then go searching for either a K-301 or a K-321 engine that has the correct crankshaft at least. If you could buy that for say...100 bucks, then you could rebuild it for another $400.00 tops as long as it could still be bored out. Talk to a local machine shop that is experienced with K/M engines and find out what they charge for boring, decking, valve work etc so you know in advance what you are getting into.
You should not go into this project unless you intend to keep and use the tractor for another ten years because you won't get your money out any other way.