If you are not sure that an oil seal is ruined, do not try to replace it. Oil leaking into the carburetor and other areas is a sign that a seal has failed, but this type of failure is unlikely. More often, it is caused by repairs that have required the engine to be disassembled. When the crankshaft is reinstalled, small burrs on the metal and improper installation can all damage the seal. If you have recently taken apart your Craftsman mower engine, you may have inadvertently caused the leak.
If the seal shows evident signs of damage or you are reasonably sure you have a leak, you will need to replace the entire seal. Remove it carefully from the crankcase cover where it meets the oil drainage sump at the bottom of the mower, or on the flywheel side if the leak appears to originate there. Use a screwdriver to pry out the old seal. Work slowly to avoid gouging or bending the rim in which the oil seal was mounted.
Before you replace the seal with a new one, clean the seal mounting surface thoroughly, removing all traces of oil and any deposits or bits of the old seal that remain. Use a Craftsman replacement seal designed for your lawn mower engine, and pay close attention to the directions so the correct side is face out from the mower. Press and square the seal with a mallet or a drill press. If you have found any problems with the crankshaft that caused the leak in the first place, like deposits, this is the time to remove them or replace the crankshaft as well.
If your seal has been leaking recently, evidenced by smoky starts and poor engine performance, you should also have the engine checked for any damage that low oil or leaked oil may have caused. Sometimes oil deposits can require you to replace spark plugs or larger engine parts that no longer work properly or have been damaged by friction.