MY guess is running with no oil in the fuel or the wrong mix. Those were 25:1 engines.
So if it's seized, one or more pistons are stuck, rings stuck, or heaven help you, the Rod Bearings are seized to the crank although that's not likely.
If your gentle when you take it apart, you may get it working again.
It's the kind of thing I used to love.
As far as $40 goes, look on Ebay etc for that motor and see what parts are for sale or wanted.
It's your $40. None of us can say if its worth it or not. =D>