Hi, got myself a used McCulloch 105-97f rider, and I need some help with location what could be wrong:

1. It smokes REALLY bad. Heavy white smoke and oil dripping from the exhaust, so I started out with replacing the head gasket for a new one; cleaned cylinder and head from old gasket-parts, and torqed the headbolts properly and in asymetrical order.

2. At next startup it still smokes just as bad.
Oil-level is ok (new oil in it), and new sparkplug.

3. Did a leak-down test, and got air coming out of the intake (rocker arms disconnected when testing)

4. Took the head of, and the new gasket looks ok, but when I look at the ”intake path” that runs between the rocker arms (aluminium ”tybe” casted in the cylinder), it looks as it has small cracks in it. Is this normal, or could it be a cracked head?

5. With the head removed, I can move the piston a liiiiitle bit in ”up and down” direction, but not sideways. I haven’t done a compression test yet, but will do.

My guess is a cracked head or bad piston rings (or both) but is there anything else that I might be missing out on?

Your engine parts look up:
https://www.jackssmallengines.com/jacks-parts-lookup/manufacturer/briggs-stratton/briggs-stratton-engine/200000-399999-series/215800-to-215899/215807-0132-b1 
 
 
There is a valve seal (for oil) for the intake valve (none on the exhaust) :
https://www.jackssmallengines.com/jacks-parts-lookup/manufacturer/briggs-stratton/briggs-stratton-engine/200000-399999-series/215800-to-215899/215807-0132-b1/cylinder-head-gasket-set-engine-gasket-set-valve-intake-manifold-valves 
 
however I doubt that's your problem.  What appears to be cracks in the head is very likely just casting marks..
 
Air coming out the intake valve needs to be addressed.  If over heated, the valve seat (especially the exhaust) 
are known to come out.  That is usually catastrophic so I don't think that's there yet. 
 
Abnormal piston movement is the biggest and most likely concern.  
I'd strongly suspect worn out rings, especially the oil ring.  
 
If you can move the piston up and down with no rotation of the crank,
that's very likely a worn connecting rod.  The upper and lower ends of the rod
do not have any replaceable bearings or bushings..  If you catch it early enough
and the crank shaft isn't damaged, a new rod should work.. 
 
.