I've rebuilt 5 Kohler engines using the rebuild kits I bought off of Ebay. They are a mix of Stens hardware and Kohler gaskets. The oldest one has close to 9 years on its overhaul (Cub 1450) and has had a lot of hours - still runs like new.
A 127 should have the steel governor gears so I wouldn't worry about them - if it were newer and had the plastic gears I'd replace them as part of the rebuild.
The K301 kits are cheap - especially compared to the pricing of an all Kohler kit (same parts different boxes?).
With $40-$60 worth of machine shop work you can have a brand new 40 year old engine for less than $160. The key to making an old K series last is keep enough oil in it and keeping it somewhat clean.
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Today's Featured Article - Show Coverage: Godfrey, Illinois Country Days - by Cindy Ladage. Except for last fourth of July's Old Gold show in Springfield, Illinois, I don't remember when it was so hot. Nevertheless, the heat didn't keep vendors and visitors alike from enjoying the third annual Country Day's Event. Jane Elliott said the event was originally a one man show. "Barry Seiler, owner of Country Town Farm Supply store used to invite people up to the Johne Deere store. He would give hats and a free meal for everyone that brings a tractor." Elliott said while this
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