The flywheel IS keyed to the shaft, as you know, BUT the key is designed to break if the engine stops suddenly - for instance - if you hit a tree stump with the mower.
This is a classic symptom of a sheared key. If the crank wasn't bent by the event that sheared the key, it's a cheap fix!
phil_saunders(a)bigfoot.com
Phil Saunders
April 2009