Voltage on AC motor case?

[lou-in-usa]

I'm trying to use an old Goulds well pump for an irrigation project, but the 3/4hp G.E. 240VAC motor has 117VAC on the case, so something is connecting one of the hot legs to the case, and it's going through a path with some resistance since it doesn't blow the circuit breaker; but the motor doesn't turn or hum as if were trying to start. I pulled off the rear motor cover yesterday and found some damp rusty mud packed around the starter cap. and something that had two wires going to it, that was the size of 5 quarters stacked on each other. The motor windings and centrifugal start-up mechanism were clean and showed no over heating or melting. Motor doesn't smell like anything ever melted or burned in it. I should have checked, but it didn't occur to me yesterday, could the capacitor have shorted to it's own case and be leaking voltage through it's connection to the case? What's strange is, I've had motors hum, like they where trying to start, and motors that had no continuity, but this is the first one where it's like somehow one of the hot legs is attached to the case through a resistor, and the other leg can't complete the circuit.