K321 Engine
 

Today I was able to pull the Head and check the condition of the top of piston and valves. Looks as though the engine has been rebuilt at some point in time. Piston is stamped 0.10. Valves looked good and turned freely with piston at top dead center. Could feel no side play in valve stems to bore. Pulled the oil pan and every thing looked good. Still has the balance gears and they seemed to be pretty tight to have 40+ years of work. Cam looked good. It ran good when I bought the tractor and brought it home. Not going to rebuild it. Just wanted to see if it had the balance gears and how the gears looked. It has the aluminum oil pan. Been working on this tractor for 2 years. Not a restoration, but to make it look and run better. Attaching pictures. I know you can't judge an engine just by looking at it, but if any thing looks to be wrong please let me know. Sorry for the long post. Have a great day.
Bob

Head gasket was leaking. Make sure to plane the head.
I'd remove the balance gears, but if they are tight, your choice.
What do you mean the valves spin free? Not really anything that needs checked. The valves do have good color though, I'd say they are sealing good.

Does the cylinder have a lip worn in it? Does it still have cross hatching on the cylinder walls? You can tell more about an engine by looking than you might think. Like Jon said the valves have good color. I took the balance gears out of the k321 I have on my bench without tearing it apart, but it takes nerves, snap ring pliers a bfh punch a magnet and like I said, nerves! Because you have to break them apart. If it's not using oil and the gears are tight then just do what you want and leave it alone.