Because it's air cooled does not mean the block can't crack. If the engine was running and quickly cooled such as a flood or washing the engine just after running it can definitely crack. Not what I would think as probable. Does it turn over if so do you have spark from your question it sounds like it does.
It could be a burned hole it the top of the piston, burned valve, broken valve spring or a busted cam.
If it doesn't turn over first thing is to pull the starter, starters have been known not to release when the engine starts running breaking the starter nose off and jamming the engine.
That was the good news now for the bad.
Connecting rod broken going thru the block wall. Valve head snapping off embedding in piston and cylinder head, crankshaft broken or twisted.
I have a feeling it is something simple and the and sounds like they wanted to make a quick sale