Ariens Riding Mower Kohler Courage 19 Engine Leaking Oil

I was attempting to mow my yard today and notice my engine was puffing smoke. So I take it back to the garage and take the covers off to expose the engine. I found a good bit of oil on the front underneath section of the engine directly above the muffler manifold. The mower itself is about 2-3 years old. The oil level is in the middle so its not low or over filled. Any idea of what may cause this? My first guess would be a cracked head? Would it be worth repairing or replacing the engine or get a new one? There is also evidence of burning oil on the under side of the mowers hood.