Jacobsen (NOT Tecumseh) J-321 rated 2.5hp and is one of the smoothest running and best performing (for its size) 2 cycle mills I've owned.
Lose the muffler as they are exceedingly heavy and can get in the way. Slap a small megaphone on it if noise is not an issue.
It appears that you have a diaphragm carb on there. Mine came with a Walbro bowl carb which I swapped out for a Tillotson pumper.
Pto may be an odd-ball size. One of mine measured 0.5625" (9/16").
I was fortunate to find a brand new short block on EBAY which came with a 3/4" shaft.
Worked very well on my MXK yard kart and Fox Doodle Bug.
Pic was taken in summer of 2007.
Jacobsen powered yard kart