After the less than desirable job of removing the engine from the bike, I popped the side open and found this little guy sitting in the oil at the bottom. Though I can't find any matching break point here. 
The oil pickup gear, and cam-gear seem fine. The pushrods seem fine too...hmmm...
The entire block splits diagonally right through and I really don't want to crack it open if I can avoid it. 
Alas everything looks fine under the itty-bitty rocker cover. 
I'm going to have to split this thing open. Though I can't get a socket or wrech on this little guy. I've already damaged it with a screwdriver :( 
...so I carve away the serves-no-purpose-hopefully housing around the bolt with the dremmel... 
...and I can get in there no problems.
It just won't pry apart though. I'm gonna have to get the flywheel off. I've already tried once with a really nasty claw style gear puller and ever so slightly bent the flywheel at the rims already. Blargh!!!
So I made my own gear puller by removing the claws from the cheap puller, and simply drawing up against a piece of scrap metal with some bolts nested in the flywheel. Worked first try, just like a gear puller should !!!
Turned out there were 4 bolts under the flywheel anyhow. So once they were out the sucker split open and found the break point almost immediately. Right at the end of the screwdriver. Turns out the part is an oil dipper-thrower thingamabob and I have no clue how it broke. However it clearly lubricated the big end bearing and piston as both were bone dry, and the engine was seizing up after ~60seconds of running every time. 
I found a replacement part online from the States for ~$4, but shipping was ~$18. The local mower place isn't open till early January. So I decided to make my own dipper. Here is the broken one taped together to show its original state. Behind it is an unlucky latch which probably won't be a latch for much longer. I can't vouch for the quality of the steel...but I figure it's worth a try.
So uh...that just happened... 
I'd like to order one of those.
Hammer time.
Rough as guts. 
Filed down. 
A coat of 650C paint. Done. All hail year 7 metal shop and a handful of Kmart tools.
And like a bought one, bolted back onto the engine.
It took me a while to find the alignment marker on the plastic cam gear as I was looking at the other side (from an earlier picture). You can see here I've got it wrong...but that got sorted. So some silicone gasket sealant on all the seams, and bolt it all back together. Hopefully it should last for at least 10 minutes!!
edit: Everything worked great for ~90 seconds after reassembling the entire job. Then the engine stopped and any ignition attempt resulted in a complete freewheel. I assumed the clamp on the big-end-bearing had come off, and that's exactly what had happened :( Blargh I hope nothing is seriously damaged... 
MEDIC !!
Jimmy!! Jimmy!! Speak to me Jimmy !!!