The first step I would think would be to take it apart and see whats going on in it.
Could be a broken spring, crud built up in it, rope swelled up and binding in the pulley. Can't answer this question on the info you give. The starter pulley is behind the flywheel on this model in case you don't know.
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!!!!