Just had a McCulloch with a similar problem - take off the starter cover, blast some WD 40 in to the central location bolt and between the recoil starter and cover then pull the string a few times. It should now feel a lot easier and retract fully, if it doesn't then it will probably need a strip down and a new spring - just take care as they are very long and have a mind of their own.......you will understand when you pull off that recoil spool!!!!
Good luck - let us know how you get on
Spud