Engine spits oil from the spark plug hole

This MasterCraft 3-in-1 mower with Tecumseh LEV120 engine was standing for multiple years in a garage when we bought the place. I cranked it and it appeared not to be seized. I cleaned it up, repaired some issues around the wheels and added oil and gas.

When I tried to start it (primer bulb worked) I felt high resistance in the starter cable (pull start), to the point that I could have broken the string (I didn't). So, I took the starter assy. off and tried to turn the flywheel by hand (after unplugging the spark plug). It turned slowly up to the point of compression and then it turned really hard. Now I took the spark plug off and saw that it was soaked in (black) oil. I turned once more and found oil being spit out of the spark plug hole. Obviously the cylinder is broken in some way.

However, in order to determine if I should spend time on a repair attempt I need to know what kind of damage is might be and what it would take to make this mower work some more, this time for us.