when you say the starter spins freely, do you mean you hear:

1) an outrageously fast spinning electrical motor, small sound

or

2) you car sounds like its cranking over, but there is no compression

this sounds more like a snapped timing belt/skipped tooth than anything. and ive never heard of a starter that spins but doesnt extend (to reach the flywheel teeth).

but for your sake, i hope you are right...