Sounds like a drive clutch dog issue. On the main shaft of the tiller portion there is a spring behind the PTO clutch dog. Its purpose is to allow the dog to move back on the shaft when shifting the PTO clutch and then shove the clutch into engagement when the main clutch is activated. It is a known problem area. Be sure the spring is strong enough to push the clutch dog forward against the snap ring. Also the shifter wears and won't move the front portion far enough back but it is adjustable. Loosen the two plate screws and move the plate back a bit. Also check to see that the inner part of the shifter moves with the handle, the retaining pin wears and you loose travel.
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Today's Featured Article - What Oil Should I Use? - by Francis Robinson. I keep seein this question pop up over and over again in discussion groups all over the web. As with many things there are often several right answers and a few wrong ones. Some purist I'm sure will disagree to no end with what I will tell you but most of us out here in the real world don't really care do we ? Some of them only bring their noses down out of the air long enough to look down them anyway. If you are like me you are only doing this old tractor stuff because you enjoy it. You
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