As I said in an earlier post, you have a broken connecting rod. (Piston arm is your terminology)
The engine needs to be removed and carefully dismantled for inspection. Most likely, the block did not suffer major damage and it can be rebuilt. Compression should be 90 PSI or better on both cylinders. Less than that figure indicates substantial wear.
Parts are available and rebuilding the engine is worthwhile. Boomer is the man to talk to and also work with. He will be along shortly.
Yes... it is possible to put a different engine in but when you do that, you run into engine mounting, pump mounting, exhaust, wiring, PTO clutch issues etc that all must be solved. Staying with the engine you have has lots of advantages. It means that when you are done, your tractor is still "stock", just as Case made it. Anyone can look at the parts manual and service manuals to figure out how to repair a problem or purchase the correct worn-out part.