The excess oil doesn't entirely all come out of the exhaust port, a small amount will make its way out of the bottom crank bushing too if there's a LOT of oil floating around inside the cases. Some of mine are like this with oily torque tubes after a few hours of running. Mind you, most of mine are running 10:1 so they will be a bit more oily in places.
or if the crank bushes are REALLY worn you might get a misting of oil residue onto the ignition baseplate as well. (seen that before a few times)
This is perhaps one reason why i tend to shy away from reducing the oil content in my fuel mix. I'd much rather have too much oil rather than not enough.(especially at extended high speed) The amount of FUEL is more readily adjustable in most of the seagull carbs by a few different ways depending on which carb your engine currently breathes through. How much OIL you mix into the fuel is entirely down to the owner. What oil the engine doesn't need it will soon get rid of any excess by consistent high revs.
Continuous low speed running of a typical "classic" gull normally ends up with oily gunge oozing from either the exhaust tube/block area or the pump housing outlet. Chances are that the spark plug will end up being oily as well so your engine may not want to re-start as easily.
High revs are good,gets the temperatures up where they need to be and more of a chance to burn/blow away any excess oil. Long periods of low revs or un-stressed running are bad, unless you like wiping its nose regularly! This is why we say try your motors out on a boat. It's the best way. Tank testing is just really about seeing if the engine will run adequately.
Oil is good,it's the life-blood of any engine. Getting the balance between fuel and oil in a 2 stroke engine takes some experimenting. Let's not forget that a good proportion of these seagulls will have already had a hard time over many years of usage so it's not unusual to expect slightly worn bushes ,piston rings, worn cylinder bores etc. etc. as well as a host of other ailments.
On top of that, a well meaning owner then wants to restrict the amount of oil in their aging 2 stroke outboard by converting it to 25:1
The amount of smoke these engines belch out is not all bad. This can be dealt with relatively easily by using modern bio-degradable oils and some careful tweaking to the motors fuel/oil requirements. Any prospective seagull owner that perhaps doesn't understand why these old engines smoke as much as they do might otherwise think that by converting to a 25:1 ratio might be doing the right thing. I would say think again...
Older motors (pre 1978) rely on a high oil content in the fuel (10:1 or greater) to retain some degree of compression with the resulting heavy smog. Newer motors (after 1978) not as much and possibly with slightly less smoke too at 25:1, but they still need an adequate amount of oil to begin with.
Err on the side of caution with this is my best advice. If it aint broke it don't need fixing. It's lasted this long perfectly well without any outside influence. Why start now?
Similar comparisons can be made with your average 2 stroke motorcycle or scooter. Older bikes tended to smoke more,(older by design, less thought given to emissions back then) newer bikes built within the last 20 or so years tend to smoke less,are newer by design, have had more development work carried out with more emphasis on emissions levels etc. etc. It's not all bad. My 2015 50cc air cooled 2 stroke scooter has autolube but still at a 25:1 ratio according to the manufacturer's specs. It smokes just like an old 102 for the first 60 seconds or so from cold and settles down to something a bit less smokey after that, but it still SMOKES even at 40 mph going flat out. Doesn't mean it needs a weaker fuel/oil mix and even it has a dribbly exhaust pipe. They are what they are, simple- rugged- old fashioned engines that are easy to fix and stood the test of time.
Your average seagull is no different in the grand scheme of things. It still needs your attention once in a blue moon. It's knowing which things need tweaking and what to leave alone.
Have you ever noticed that even a couple of weeks after your seagull has run and it's sitting on a stand it still dribbles some oil from the pump housing? Black and slimy. YUK . It's all perfectly normal for 10:1 or 25:1 mixes. I'd be worried if i didn't see any gungy mess.
Just my thoughts...
Jon