I just sent my 1130 back to Scharber & Sons with the exact same issue. My blower was also purchased in '08 and I am lucky (or unlucky depending on how you look at it) that this happened right before my warranty ran out. I love this blower when it is working. Unfourtunately it has spend the majority of it's winter life at Scharber & Sons repair shop -this is the 5th time I've sent it in for repairs. My problems to date:
1. Primer cap fell off of the underside of gas cap and blocked the fuel line.
2. Water got on the disk and the blower wouldn't engauge the wheels. They fixed it with a gasket that was the 1st recall.
3. Water got onto the disk drive again and the wheels wouldn't engauge. They fixed it with a 2nd gasket and somekind of sheet seal under the engine (2nd recall).
4. Gas got into the piston/carburetor and seized up the engine.
5. Belt came off the auger assembly - I'm guessing a shaft or wheel is bent. I'll let you know when i get it back from the shop.
That being said, my neighbor just bought a brand new 28" Arens and only one of his wheels engauges so he had to take his back. I'm beginning to loose faith in American products...
I have both an 1130 and 1330 and have been lucky so far. Well the 1130 needed sealing and after that it's been fine. I never had the gasket put under the engine mounting bracket on the 1130 and I wonder if it could have been misaligned during that process. Let us know what you find.