I love those POS plastic pumps with a Passion. I believe the I save tractors guy sells a new Diaphragm for those old school Kohler pumps. Some people convert them to Briggs vacuum pumps. Good call on not starting it. It can break the dipper off of the connecting rod and it blow up. I would try a small magnet in the hole. You might also be able to fish it out from the drain. If you going to pull the engine, you could just pull the pan. I would consider going through the whole motor. New rings and gaskets it will last another 35 years.