New to me Grasshopper mower, 620.

[olcowhand]

If the fibers somehow got past the air filters, then the crankcase breather tube could let them into the case/oil.

 

[Cvans]

Upper or lower crankshaft seal bad? Crankcase breather filter intact? There is only a couple places that fuzz can get in the crankcase. Almost makes me wonder if somewhere along the line the engine was run with the oil filler cap loose or off. Either way if the cost is not overboard the engine sounds slavageable. Good luck!