Outdoor Power Equipment and Small Engines - 10hp Tecumseh snow blower won't start

My 1980 Bolens snow blower, with a 10 hp Tecumseh engine, was running good, but died while plowing. I've since bought a new one, but want to repair give this one to my neighbors, who can't afford one. With the spark plug removed, but attached to the wire, there is fire at the (new) plug when cranking it over with the electric start. However, the engine will not fire, even with ether sprayed into the cylinder before replacing the plug. A friend suggested the flywheel key may be sheared. Behind the flywheel nut there is an odd disc of metal (with notches) almost emdedded into the plastic fan. The fan covers up the iron flywheel, which I assume has holes in it to enable pulling it off the shaft.

Is the shreared key a likely diagnosis? The magneto was replaced a couple of years ago.

How does one remove the plastic fan without breaking it? And what tool is best to remove the flywheel (I presume a screw-type puller)?

I don't think you need to concern yourself with removing the flywheel just yet as it appears you have ignition. If you have spark and since it is a 1980 model year, the flywheel key cannot be sheared since this is a point ignition engine unless the key sheared only ever so slightly, which is not usually the case. Forget the ignition for now and concentrate on the combustion chamber. As an initial diagnostic step, remove the spark plug, tuck the plug wire out of the way, keep the throttle control on the "Stop" position (in order to kill the ignition), place your thumb over the plug hole, pull the engine over with the rope start. You should have significant blow-by past your thumb and the compression should "pop" past your thumb that has great pressure on the plug hole. Now, without good knowledge of what this should feel like, you may want to purchase a compression tester and the reading should be a minumum of 60 psi. Post back with your diagnosis on the compression and then we'll procede.