mech12

get yourself an inline spark tester.  remove plug boot hook the tester up.   when tractor start dying check tester, it has a clear window in it to see spark,  does the spark sputter or just stop????  now you say with the deck removed it runs fine??   check fuel filter or replace it.   does this engine have a fuel pump on it or is it gravity feed??   check your safety switch on the deck  make sure its in good condition not cracked and shorting out.

friij is correct on this part number  etc.   it will have same bolt pattern as existing coil.   all you need to do is remove old coil ,  cut the points wiring and tuck underneath, install new coil and    properly gap.  usually with briggs coils the include a gap guage with the coil.    DO NOT REMOVE the plunger.  if you dont know what im saying than you should be all right.  just cut the wires.     

  what we use in the shop is a grease type fluid called  bentonite.   its semi liguid  it also contains clay,  which acts as the adhesion element in it.  keep in mind with these gearcases the are design as a splash system.  this means very little oil in bottom.  as gears rotate they pick up the lube from the bottom and splash onto top gears.   sucks.  hence the bentonite.  this stuff actually stick to all moving parts in gearcase.   this is a tecumseh product the run in the peerless transmissions.   yes if its leaking and within the 2 yr time frame i would take back.

  you say a bit of carbon,   how about a chunk of carbon 

   no its not a gasket.    the great ariens name went cheap on those cases and omitted the gasket and the use  515 gasket sealer.     stick with  mtd brand.