Clytle, no worries. I know the guy I bought mine from. I think he took decent care of it. It's just one of those freak things.
To answer your questions though: it has an 8 hp Kohler engine. No, the teeth were really not worn thin at all - they were just separated from the pinion shaft - all of them. Hard to believe, isn't it. The tiller attachment is 26"
Glad to hear it wasn't the gearbox I worked on, being that I work on lots in my line of work, I take failures personally.
Hard to believe? Not if something hard got into the gears. It looks like the bearing race in your picture is broken, if that got in the gears it would do it.