Small Engine Troubleshooting Problems? Ask a Mechanic Now.
Using gloves and being very careful not to get cut, does the blade turn completely around by hand without anything binding or locking up? You need to tie back the bail lever to the top handle of the mower while you do this or have someone hold it for you.
When you life the mower be sure to tilt it no further than necessary and keep the spark plug and carburetor (air filter) to the high side so you don't get oil into the cylinder.
Let me know and we'll continue...