It should have a little play and it will still run with a lot of play. The first thing that happens is it sprays fuel out the front while it is running.
If it doesn'r start I would suspect something else. I know you may have checked these thing but I'll mention anyway...
Weak or bad glow plug.
Flooded. Remove glow plug and flip it fast 10 times to remove any fuel in the crankcase.
Carb barrel 180 degrees out. Be sure to follow these instructions
http://www.mecoa.com/faq/carb/mixdisk/mixdisk.htm
last if you do need a new crankcase call Randy at 800-359-6972 I have some factory 2nd I will tell you about.