Most likely your oil leak is caused by internally blown head gasket. They blow between the fire ring and the head oil turn. Sometimes they smoke but usually you just get pressure in the crankcase causing the shaft seals to leak.
I would not "rebuild" the engine, mainly because so many exist and can be had cheap used. I've refreshed many and gotten years more use with just new head gaskets and crank seals.
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JD x475
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