TERRY - I've always left the studs the gernade gears mount on in place. They don't hurt anything as long as the gears are gone.
You can cross out everything in the manual about how to install the gears and write in, "Put gernade gears in a zip-lock bag and throw in a box" if you want. Just make real sure you get the timing marks for the camshaft right, and double-check it.
The key for the flywheel should be O-K as long as it shows no signs of shearing. The key for the S/G basket pulley I always replace with a longer one, as long a piece of key stock as you can use. The larger HP Kohler's tend to wallow out the keyway in the drive end of the crankshaft and a longer key helps prevent that.
I've never used Lucas engine assembly lube but as long as it's a thick oil lube it should be fine. Think the last engine I rebuilt I used something by Permatex, or maybe it was Felpro. I've even used Lubriplate white grease assembly lube before with great success. Comes in a big plastic squeeze tube, 6-8 oz, enough for several Kohlers.
Camshaft goes in first. Place the cam about where it belongs and slide the shaft into it but don't tap it in tight, measure the end play with FEELER gauges, they're cheap and you can buy them at Sears or any auto parts shop, maybe even a Big Box store or local hardware store, and remove the center shaft, add the amount of shims needed to get the free play to the low end of the range for the cam, .005"-.006" is good, then install all but one of the shims on the end away from the cam gear and put one shim on the other end. Tap the shaft home. Then install the crankshaft and set the blower housing plate into place and measure crankshaft end play with feeler gauges. Install that many shim gaskets allowing for the proper end play per the spec's in the manual, shoot for the low end of the range. Remove the plate and coat all the shim gaskets with some sort of gasket sealer, just a very thin swipe on one side of each gasket is enough and both metal surfaces, then reinstall the plate and torque the four bolts to spec. Double-check the end play of both the cam & crank and you should be done. Ohhhh.... and double check the cam/crank timing marks AGAIN.
And if you removed the governor assembly that all has to go back in first before the cam, etc. It's the last thing out of the engine, so has to be first going back in.
After governor, cam & crank are in, install piston, rings, rod, make sure the marks on the rod are facing the camshaft, and both marks on the rod line up, it's either right or it's wrong. Torque the rod bolts. Technically you shouldn't re-use the rod bolts on the new "Posi-loc" style rods. Also make sure you torque the rod bolts in steps, do not tighten one completely then the other.
Check the valve tappet clearance per spec's in the manualand adjust as needed, install the valve chamber breather plates & "Stuff", the carb, governor linkage, points & cover, oil pan, and use gasket sealer on the oil pan, just a thin swipe is enough. Install the head, torque in three steps in the order shown in the Kohler manual. No special coating or sealer required on the Kohler head gasket.