Well in my opinion your on borrowed time. In lawn mowers I see them all of the time with 500-600 and they have broken rings an are burning oil. They are NOT a heavy duty motor anymore. The Kohler quality went out the window 30 years ago when they went away from the single cylinder air cooled motors. None of the ones since have lasted like they did.
I would tear it completely down and see what is wrong. I would bet that you have a piston ring on the one side that is either weak or broken. You maybe can get away with de-glazing the cylinder and re-ringing the motor. You can easily have $500 in just doing that but it would be cheaper than replacing it at $2K.
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