Hi Jim, we just got back from 4 days at the Coolspring Power museum.
Regarding your too much oil question.... You do not have too much. Oil should pass through the engine. As long as you are using a naphtha based fuel and plenty of oil, the O-ring will last a long time. Since I started mixing fuel a bit rich with oil, I have not yet needed to replace an O-ring.
To get the oil away from the engine, I bored a hole straight through the front of the muffler and plugged all 4 holes.
Or... you could replace the muffler with a short straight brass tube about 1-1 1/4" long.
Wither way the engine will stay a lot cleaner.
Enjoy!
Gil