Bill,
I paid $100 for a seized KO motor in great condition otherwise (no broken fins, paint almost perfect) 2 years ago and was happy to pay $700 for a seized very early sandcast that needed paint and did not have the round oil filter housing, cases in good condition. I have a 12/69 built K0 that has engine number 1016446 as well.
The sandcast engines went from 100001 to 1007414 I believe, according to my parts book. Recheck your engine number, I think you dropped a number as stated earlier. Also count the screw holes in the clutch cover on, 9 holes and it's a sandcast, 10 it's a diecast but may still be a very early motor.
Hope this helps.
Cliff.