Puck,
Did you resolve the problem? I have the exact same thing happening with my 3 month old Craftsman. One Augur spins freely (same side as yours). I'm about to take it apart and i'm hoping it's as simple as a sheared locking pin. Here's the link to my snowblower.
http://www.sears.ca/gp/product/B001JHWG1O/sr=1-4/qid=1233242236/ref=sr_1_4/185-2559315-2707731?ie=UTF8&searsBrand=core&mqnodeid=394759011
