I accidentally used regular Castrol 2 cycle motor oil (instead of craftsman synthetic) and now the engine is seized. What do I have to do to repair the engine? The manual states to only use synthetic so I assume Sears will not repair this unit as it is only 4 months old.

Is it still under warranty? Then more then likely sears will replace it...

It also isn't the oil choice... Unless you use water cooled 2 stroke oil...
Craftsman synthetic is made and bottled from one of the oil manufacturers (I forget which) and it doesn't matter.. synthetic or regular, this is not the reason it seized.
These engines are throw aways and not worth having fixed unless the warranty covers it.

He's right take it back and RAISE HELL. If you go into the junk selling business you got to expect some grief. If not under warranty you may try to Break it loose and continue using with a heavy mix. I doubt your choice of not using their endorsed oil had anything to do with the seizure.

I accidentally used regular Castrol 2 cycle motor oil (instead of craftsman synthetic) and now the engine is seized. What do I have to do to repair the engine? The manual states to only use synthetic so I assume Sears will not repair this unit as it is only 4 months old.
First, I don't think it's repairable if the engine is truly seized. 2nd, I have never heard of a Mfg requiring, even recommending synthetic 2 cycle oil over just regular 2 cycle oil, I would take it back to Sears, ask them to replace it. See what happens. PS, I probably sold 500 of these over 5 yrs or so a few years back, right when syn oil was being first introduced.

I have been able to break a few free and get them to run again, sometimes there is limited damage to the aluminium piston and chrome plated cylinder.. . Not going to run great but what ever works. Are you sure there is not a shirt or small dog caught in the blower fan?