It sounds as if you have a piston or sleeve on the back cylinder that has come unglued. You had better not run it anymore or there is a good chance you will ventilate the block. You can remove the cam with motor in tractor but not the crank. Since you like the tractor and you really don't know any history of the motor, I would be inclined to pull the motor and do a major overhaul. If you want to get by on the cheap, the first thing I would do is pull a rod cap and a main cap and see what your bearings look like. If they look good then I would plastiguage them to see what kind of clearance you have. If all of this checks out then I would be comfortable doing an inframe overhaul with sleeves and pistons. If any of the bearings look suspect, don't waste your money doing an in frame. Also make sure to have the head checked out and have the valves ground to the correct specifications. If the valves are not done just right on this tractor it will start really hard. I'm afraid there is probably no real cheap way out of this.
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