My LT 2000 craftsman lawn tractor will not move forward or backard with engine running.Both wheel will turn freely with the rear end raised.What could be the problem?

Broken or loose drive belt. Sometimes you can get a another year out of a loose belt by adjusting the spring loaded tensioner pulley. Try Parts & Accessories | Shop & Find Lawn & Garden, Appliance Parts at Sears Parts Direct | SearsPartsDirect.com from Sears (http://www.searspartsdirect.com/partsdirect/index.action) for a manual, you'll need your model number.

No, tried that. The belt seems fine. Any other ideas?

OK this will take two people to do. When you release the cluthch does the belt turn both the pulley on the engine and the one on the transaxle?

Does the engine need to be running for this?

Yes.

JS is correct, the engine needs to be running with one person at the controls. The other person needs to squat or lay down with a flashilight to observe the pulleys. If the transaxle pulley does spin then your transaxle has a problem and is not engaging the gears. This could be a linkage problem of much worse.