Flywheel key keeps shearing on Briggs and Stratton 331877-3036-G5 engine

Running a rope into the cylinder is a good way to bend the valves and/or push rods. What I use is a pry bar with its flat tip (flat blade screw driver style) inserted into teeth of the ring gear and up against the coil mounting post. There are a couple other methods too. One is a modified piston rod for holding the lower crankshaft (PTO end) and another is a pipe wrench on PTO double stack pulley on engine that uses them.
 
There should no plastic between the bolt head and the flywheel. On 330000 models after datecode 120630xxxxxxx Briggs did add a washer under the bolt but this is along with a modified crankshaft and flywheel.
 
You need to read Briggs APSI 82 and 89.

Well I have doing this for 10 yrs myself and have yet to break the coil posts. Matter of fact I just torqued a 126L02 flywheel using the method I stated. I would have nor recommend something that I knew would cause damage. Matter of fact Kohler actually recommends using a section of an old starter ring gear place in the flywheel ring teeth and up against the coil's mounting post and alternately the use of a old connecting rod with a heavy washer modified with a flat side to securely mount in the PTO end on the crankshaft key way.
 
Using anything other than a torque wrench to tighten can lead to under and over torqued flywheels. Over torquing flywheels on tapers can cause stuck and crack flywheels. Plus the newer light weight flywheels on the 08P and 09P can literally split in half if over torqued. With a little research on this end I can the picture of one that a DIYer brought in the he split in two and then attempt to pop rivet back together. Under torquing will lead to repeated flywheel key shears and eventually a damaged flywheel key way.