Excellent pictures - many thanks!
I can see no damage whatsoever to the key or the flywheel key slot so it looks like a dead end there
Time for a careful reassembly!
I'm really struggling to identify a problem with the kick back now, as the timing is completely fixed courtesy of the magnets in the flywheel, the keying of flywheel to crankshaft and the igniter (or coil) unit.
I assume the igniter is the original?
When you reassemble, the coil must be in very close proximity to the flywheel as it spins...the gap should be in the region of two or three sheets of thin paper.
John