Just so you don't feel alone with this problem, I am helping a friend with the same problem. He bought a basket case cj7, I helped him wire up a condensor to see if it would start. It sounded like metal on metal when we hit the starter.
We took the plugs out and determined that the motor was free, took the starter off of his scrambler and bolted it up to give it a try. It started and ran for about 5 seconds before it used all of the gas in the carb.
Next we put some gas in the tank and thought all we needed to do was a little cranking until the gas got to the carb.
Again, it sounded like metal on metal when we tried to start it, and the engine only moved about 5*.
Spinning the engine with the starter off, I cannot see anything wrong with the flywheel. There are a few metal shavings on it, but it doesn't look like the teeth are ground down.
Has anyone has this problem and corrected it?