Ah,
The elusive early edition 051AV"CC" (Cookie Cutter) .
Milling saw chip ejector Mod?
I will guess that the nut came loose the all the clutch goodies started a grinding session.
All while cutting a big stump.
Been there, done that.
Just didn't do it so many times that it drilled a hole in the cover.
Probably didnt realize it until the saw died because the oiler gear spun outward creating a massive air leak, and the saw died.
I've never seen an exhaust exit like that one. I've worked on some pre-1974 ones too.
Nice saw.
Just duct tape a vacuum hose to it. Lol
actually, it's an 050AV. I got it this way . I suspect the clutch drum came loose like you said and drilled a nice hole in the cover. Good runner though.