This may help you to decide
1. The design of the Hydriv system is identical from year to year and model to model BY AND LARGE. This statement means that a 4023 Ingersoll's hydraulic system cannot put any more HP to the rear tires than a 222 with a 12 horse Kohler can. The 23 hp Vanguard will help you blow snow or wade through tall, thick, wet grass a bit easier than the 12 hp Kohler will because those attachments are feeling the higher HP by way of the V-belt driving them.
2. It's a lot of work to retrofit a different engine compared to performing a simple rebuild. My suggestion is to rebuild the 321 PROPERLY. Leave no stone unturned. Either buy NEW balance gears or leave them out. Bore it, do the valves, springs, guides,seats, new rod, piston, rings, gaskets, seals and bearings. Either polish the crank or grind it undersize on the throw. Have the camshaft checked by a competent machine shop. Replace the points rod. Rebush the carb throttle shaft. New plug, wire, points and condenser. Deck the top of the block and the head.
Once you put a good running Kohler K under the hood, you will be surprised at the difference in performance. In addition, the tractor will essentially remain STOCK and that means it will be worth for more if you decide to sell it.
