There would be several factors in making a decision like that that really only you could answer. The most obvious would be how is the tractor to start with, what are your expectations and does the tractor still meet your needs. Let alone the mechanical needs to get the engine where you want it. Did you rebuilt it yourself and would you be again? Kudos to you for keeping the beast a breathin'.

What make of motor is it? Are you sure it's worn out or maybe just a bad exhaust valve? Did you do a leak down test on it?

I just rebuilt a 12HP cast iron Kohler that was 35 years old with about 700-1000 hours and the only thing wrong was a burned exhaust valve.

The original engine was a Kohler KT17,a horizontally opposed twin which is long out of production. This engine was never a favourite of mine, the early versions had a bad habit of chucking connecting rods.
J-D offered a kit, may be still available, to install a Briggs and Stratton 18 hp Vanguard V-twin. It is not a cheap conversion but if the tractor is in good shape it might be worth considering. Other than the engine, the KT17 was a fine machine.

I've heard the same complaint about the Onan 16HP used in the 316's.

It makes me think about my own, now being over 20 years old.