I got a 1861 and I love that engine. I didn't like the plastic, but, that is gone now.
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I would fix the seals and run it. That is the best value for your $.
If you ever wanted to sell it, the conversion would drive the price to 10 cents per pound, because nobody trusts the upgrade.
Briggs V-Twin engines are common upgrades, so they hold their value.
Yea I understand you have the flathead, I'm just giving my 2 cents worth on what I have seen happen to tractor prices for machines that have been changed.
I would never try to sell the 1861, it is probably in the 10 cents category because of the hood swap.