I can probably be of some help on this topic, since I've had it happen twice on my 2140 with the Cummins/Onan engine.
That is the same place where my gasket has failed--twice. I'll bet if you look close, you'll see that the gasket is sucked in, not blown out. It doesn't matter; the end result is oil all over everything.
There is probably nothing wrong with your cover.
Single cylinder engines have the biggest change in crankcase pressure which means it's hard to keep them leak-free. The Elite engine uses a reed-valve system to ventilate the crankcase. Filtered air is drawn into and exhausted from the crankcase. If there is blockage of the reed valve, crankcase gaskets can get blown out. If there is restriction to the intake of air to fill the crankcase, gaskets can get sucked in.
Since mine failed by sucking the gasket in, I began looking for causes. One think I found is this:
--Onan recommends the air filter wrapper should be cleaned every 50 hours; more often in dusty conditions.
--Cub Cadet recommends the air filter wrapper should be cleaned every 10 hours.
That's a huge difference and I was simply going by appearance in deciding when to clean the wrapper. Most times, it would be once a year, or anywhere from 40 to 80 hours. Since I found the Cub Cadet recommendation, I've been cleaning and re-oiling every ten hours. I also replace the air filter element more frequently now. With the wrapper, it always looked clean so I continued to use it. One thing I learned from a Tech Rep from a Fleetguard is that you can't tell anything by looking at a filter--only a suction gauge can tell whether a filter is clogged.
The repair itself isn't hard if you're handy with wrenches and sockets. You do NOT have to remove the engine to do this repair. You will have to loosen the bolts holding the engine to the frame but that's all. There are advantages to NOT removing the engine. Once you have removed the side panels and hood/grill assembly, the work is straightforward. Drain the oil, remove the blade clutch, governor linkage(IIRC), then remove the cover bolts. Blade clutch bolt is best remove with an impact wrench.
Remove the cover by GENTLY tapping the sides with a rubber hammer. There are four gears (crank, cam, and two balance shafts) plus the oil pump under this cover. Try to not disturb them. If you do, all is not lost--there are timing marks on all of them.
Once the cover is off, gently remove the old gasket and clean the mating surfaces of the cover and engine block. The crankshaft seal doesn't come with the gasket set, so if you want to replace it, you'll have to buy one of those, too.
The last time I did this, I used gasket sealer. I'm not sure I would do that again. Gaskets should seal without glue and one drawback is, the next time you have to go in, you'll have a harder job cleaning those surfaces that got the sealer.
There is a torque spec and sequence for the cover, too. Starting with the bolt that is just slightly left of the 12 o'clock position as you face the engine, torque the bolts to 12-16 ft-lb. Torque the first bolt twice. Put the rest back together in the reverse order that it came off.
FWIW, the E140H service manual containing all this is on the internet.
Hope this helps.
