Next day I had gas all over. It was coming out of the carb everywhere all onto the garage floor. It was in the crank case over 1 inch above the dipstick fill mark. This was hard to see as the gas and oil did not mix together. Smelled like gas
Now its getting narrowed down. It either a stuck float or the needle seat is bad.
Sincee you found gas in the oil, change the oil. Get a carb kit and get a Needle Valve and Seat kit. (Kohler's, Honda's, and Kawasaki's will have the Needle Valve and Seat come in an entire Carburetor Kit [gaskets, o-rings, washers, etc]. Unfortunately, that is the only way you can get a Needle Valve and Seat.)
1. Temp plug gas flow to the carburetor. Remove fuel line. NOTE: **MAKE A NOTE OR DIAGRAM OF HOW THE GOVERNOR LINKAGE IS CONNECTED TO THE THROTTLE ON THE CARBURETOR.** Remove the carburetor.
2. Over a gas friendly pan remove the fuel bowl nut and remove the fuel bowl.
3. Invert the carburetor and remove the float and needle valve by pulling out the float pin.
4. Remove the needle valve from the float.
5. Remove the needle seat by pulling it out with a piece of coat hanger wire or blow the seat out with compressed air from an air compressor. DANGER!: **IF YOU BLOW THE SEAT OUT WITH AN AIR HOSE, POINT THE BOTTOM OF THE CARBURETOR AWAY FROM YOURSELF, OTHER PEOPLE/PETS AND THE WALL.** Blow the seat out by blowing air through the fuel fitting. Keep blowing until you hear a pop.
6. Look at the new needle and seat valve. There will be grooves on one side of the seat. When you install the seat, spray some WD-40 on it and install the seat so the grooves face down in the carburetor, (you should see the smooth part of the seat facing you). Press the seat in with a flat punch until the seat bottoms out.
Remove the needle valve from the float and replace it with the new one in the kit. (Assemble the wire clip to the needle valve) On Tecumseh engines, the long end of the clip must face the Choke or air cleaner side of the carburetor. If you fail to do this, the needle valve will not seat. With Briggs and Stratton, Kohler, Kawasaki and Honda, it does not matter which way the end of the clip goes.
On Briggs engines 8-22 HP, the seat is brass and pressed into the carburetor. It can only be removed with a Tap and a bolt. I recommend you take the carburetor to a local shop and have them pull the seat out for you and reinstall the new needle valve and seat kit.
7. Assemble the float and needle valve to the carburetor. Check the float level. Make sure the float is parallel to the carburetor body. If you have a pressure tester, connected it to the fuel fitting. This will tell you if the seat will hold gas or not. If the seat can hold 5 PSI, then it is OK. Install the fuel bowl and nut.
This is for float style carburetors only.
Screw in the adjustment screw until finger tight. Now back it out 1 1/2 turns. This should be sufficient enough for the engine to run properly. This adjustment if for all Briggs float style carburetors and all Tecumseh float style carburetors. If the engine does not run correctly, let engine warm up for about 5 minutes. Screw the screw in until the engine runs erratic (lean). Then back it out until the engine runs erratic again (rich). Now turn the screw half way between and this should be good enough