Bearing failure on the output shaft. There was a seal missing on the main shaft, rust got in and eat the needle roller supporting the output shaft, which in turn lunched the main bearing supporting the gearbox and caused a few gears to chip due to their wobbly motion.
It's been like it since early 2007. I found a repair estimate hidden in all the paperwork. The previous owner just ignored it and overtightened the pulley to hide the motion.
Jagged: That's not a way to do it: Sell something with a hidden fault. The seller should have told you about that undone repair. He sold you a rotten apple.
JBJ: I'll join you in the small hours. We'll pull this guy's boots off and tickle him 'til he confesses. And pays Jagged at least half the money back!