Since it spins free with the plug OUT but won't crank with it IN. That tells me the starter is probably fine, it's just hitting too much resistance when it has to fight compression.
First thing I'd do is pull that plug and look inside the cylinder. If there's fuel sitting there, it literally can't compress and the starter just gives up. Happened to me on an old Craftsman once — cranked it out with the plug off, threw a fresh plug in and she fired right up.
