New Belt to long?

Brain fart should have been "too long"
Went back & edited it to read correctly

The correct sized belt in the correct unworn engine pulley sits about 1/16" inside the rim when there is 3 belt keepers so it can not fall off.
On mowers where the engine pulley has just a bolt as a keeper the belt sits deeper to stop it falling off when slack.

Belt 954-0341 codes out to a Gates 85890 which is 89.15" x 5L listed as a vari drive belt so it should fit.
But it looks like you will really need a belt closer to 2" shorter which would be a Gates 6988.

Belts are a nightmare with old mowers because there are so many things that come into play
Fitting shorter belts is my fall back and down here it is a lot cheaper that replacing the front pulley.
As previously mentioned those pulleys look bad and they look bad on the video of the mower running as well.
Of the 2 the new belt will be the cheaper , just bear in mind that if you do replace the pulley that belt will not fit.

A reasonably common repair that comes into the workshop because the customer has gone to the MTD shop & been quoted $ 500 for the repair.
Because the franchised dealer can not fit shorter belts so he has to replace all of the pulleys so the mower can run a std belt.

Old mowers are a bigger problem because you never know what has been done to it before and all of the domestic mowers have a 1" drive shaft so any pulley could have ben fitted.
There is an old after market pulley catalogue here that lists 276 different stack pulleys

Tried a 88" belt and it's to short. It works but it's always spinning the transmission. I don't know if a 89" would work or not now.

*EDIT* Took back the 88" belt and got a 90" belt and it still drags. It seems like the engine pulley is fine as it's catching very easily. Also with a shorter belt it still isn't going fast as it should.

When you fitted the 88 " belt did you back off the control rod to compensate for the shorter belt ?
Were the other belts 5L profile and not std 5/8" B section, it makes a big difference ?

As for the front pulley.
It does not make a wrinkled rats rectum how well the belt picks up on the pulley.
If the pulley is worn then the effective diameter is smaller thus the belt speed will be lower so all things being equal, the mower will always run slower with a worn drive pulley.
And not trying to be picky, but bend the retainer tabs back square to the frame and pull the pulley stack down to swap the belts .

A new pulley will have the belt running flush with the outside edge of the pulley.
It might be worth while to slip under a new one sitting in a showroom and take a few photos of the front belt.
The troybilts have cruise control so you can lock the drive pedal down to tension the front belt.

Be naughty , go to a different shop & act like you are thinking about buying one

Because the sides of a pulley are sloping it is hard to evaluate wear from just looking at them.
Get a thin drill bit and lay the shank end across the working face of the pulleys.
The open area under the drill bit is the wear.
On the variable pulley, the sliding sheave can wear in an almost step like fashion and these tend to prevent the sliding sheave moving properly up & down the axis.
You can tell a person who uses cruise control because it accelerates the formation of steps in the pulley.

The actual speed of the mower is nothing more than the differences in the effective diameters of the drive & lower variable pulley and the upper variable pulley and the tranny pulley.
The belt length makes no difference provided it is short enough to get the sliding sheave to the limit of its upward travel .
Now if you want to get your head around this calculate the circumference of a drive pulley starting at 4" diameter in 1/8" diameter incriments then multiply this out by 3600 ( engine pulley speeds ) to give you inches of belt travel / min
You will see the difference between 4" and 3.875" is massive so a small amount of wear in the drive pulley will make a big difference to the final speeds.
Most of my customers are trying to save money so I consider a pulley worn out when the root is polished because in that condition it is not transmitting full power to the belt.
There is a big difference between worn and worn out.

Your friendly MTD dealer would have replaced the engine pulley and the variable speed pulley and probably both idlers and the tension arm, fitted a new standard belt then relieved you of $ 500 and your mower would drive like new.
And if that is what you want that is what you have to do, end of story.

From your original post I thought you just wanted the mower to run so you could cut your grass , not make the mower run like new.