If there is a button on the handlebars to switch from "HI" to "LO" range, you might want to start by checking the switch, and then trace it forward to the transmission itself. It doesn't mean it is the problem, but it is fairly common for the electronic side of a transmission to be the problem rather than the transmission itself.
There can be alot of different reasons for that. You should probably start with a general check up, to at least rule out the more serious possibilites.
Well, first you need to establish what type of abuse you are looking to reveal. Next, you need to speak with someone who investigates the type of abuse you are attempting to reveal. You need to define exactly what constitutes abuse according to local laws, and how evidence of such can be preserved in an acceptable manner for prosecution at a later date and time.
I'd try Ebay. They have some surprising things on there.
Check your fuses.
Tell Santa on them.
I'm not familiar with that brand of small engine, but what you describe sounds as though it is still out of timing. Underneath the flywheel, I believe you will find the points. It sounds as though you need to check the position of the points. Whatever caused that shear key to shear, probably caused alot of that energy to be absorbed through to anything attached or in contact with the crankshaft.
Check things out here: http://www.ehow.com/how_2038718_fix-car-mechanic.html