oops, I guess that I should have read what you said more closely. With the plug wires pulled you should be able to put it in gear and turn the motor over using the prop (make sure that you only turn in in the normal direction) sounds like a shaft or gear problem but try that and see if you can or if by chance the outside of the prop turns and the inside doesn't. Have a friend with a newer motor that the inside was turning because the nut was to loose.
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