The first thing is to verify that the hole in the top of the fuel cap isn't plugged- had 3 in one day last week in fact. If all else is good, go ahead and replace the line . Usually you watch over this more onna pump type, but can have effect with these also. Had one that the same thing happened on a Deere w/ that engine- of course the rubber strap that he used to hold his chute up was also hooked around the fuel line....

***"of course the rubber strap that he used to hold his chute up was also hooked around the fuel line...."***
Haha, or Aha! Poetic justice is the best kind :^)

I have had the same issue since the first season. Changed the fuel filter and no change. The filter I installed is clear, so I can see fuel flow, when there is flow. This is a fuel flow issue as I can see the filter starve, and watch the filter refill either by gravity or forced air when I blow through the tank cap hole, the filter fills up fast and the engine runs for about 2 min, or when I hit a slight upward slope. Usually not an issue on the down hill side. I have dropped the fuel line from the clamp, no change. The problem is worse going up an angle and in hotter temperatures. There seems to be some sort of vaccum or back pressure keeping the filter from flowing fuel. It sounds simple, but short of forcing fuel to the filter, I am at a loss. I was think of adding a larger ID fuel line. It's a real pain.

Since you state you have the same issue, everything is identical except for the serial number of your Craftsman tractor.
Here are my comments on your issues:
Forget about watching the fuel filter and thinking that it is somehow starving for fuel (the filter itself), it is not. No matter what you think you see, it is not indicative of a problem. The "empty filter" subject has been debated ad nauseum and no matter what you say or do, the filter is not going to abide by the notion that it should be full of fuel.
Going for a larger diameter fuel hose will not help you out either. The hose nipple at the tank, the filter, and the carb inlet will still be the same size, so you will not realize any increase in flow or availability of fuel.
If your Craftsman with the 17 HP Kohler is a gravity fed fuel system, you may be able to improve the OEM configuration by adding a fuel pump.
In lieu of adding a fuel pump, you may try routing the fuel hoses away from any direct heat sources and/or insulating the hoses. If the filter you installed is a much larger automotive type of filter than the OEM Kohler filter, you should be OK in that respect. But if the clear filter you chose is a small one, near in size to the OEM Kohler filter............that could be the whole problem.
Kohler engines are very finicky about wanting a Kohler brand filter (and it has to be the CORRECT Kohler filter even then). But if the clear filter you have on there now is much bigger than the OEM filter, it is not your trouble.

Back to the original post, I notice he Did Not replace the filter but blew it out with compresed air, the second poster randy changed the filter but their still may be water in the tank. Seems most fuel filters will nearly block up with any water and not allow fuel to flow.

I would go ahead and replace that filter again tsg1027 and see if that works. Randy I would also replace the filter again After you drain and clean the fuel tank. It would not hurt to install all new fuel hose in both cases, if you got some 'gasohol' or ethanol blended fuel it could be eating up the inside of the fuel lines.