I'm no motor nerd, just a guy with a 782 with a KT17 series 1. I'll wisper.... "it's running good". I watch the oil level and consistency like a hawk and change it regularly, keep the carb tuned, and I don't run the PTO all day in the summer, as I had experienced a bit of overheating in the past. I also put a fuel filter and in line fuel shut off to keep excess fuel from leaking through the carb float valve. Over the years I owned it, I changed the plugs & wires, cleaned the points and changed the ignition coil. All small potatos and it tells me when it needs attention. I'm learning to listen.
I guess my question for you is what has been done to diagnose the engine issue? Are you sure it's an engine lube issue? Does the crank turn or is it seized? I'd start there. What else is known about this machine?
IMHO the 782 even withe the less desired KT17 series 1 is a formidable machine.