Okay, it's a bushed engine. A set of worn bushings will give the same results. If it was mine, I'd pull the crank and look for wear on it and the bushings. A quality caliper or similar would be good to check for either being our of round.
I have an old OS 25FP that I'm going to put in a Kadet Jr in the not too distant future. Other than being smaller than your GP 42, it's basically the same engine. It's getting torn down and checked over before it goes in. If the bushing or crank aren't in good shape, it's getting a new 25LA bushed or 25FX bearing engine instead.