all 2 strokes will spit some oil out of the exhaust...this is normal.
but, the more oil you have in your gas, the more oil will come out of the exhaust.
look at any weedeater or 2 stroke motocycle exhaust...they all have some oil residue and will spit oil on occasion.
yours is dripping a lot because you are probably running the 16:1 gas/oil mixture that is recommended for the break in period. 16:1 is a lot of oil in a small amount of gas. (16 parts gas to 1 part oil) a 32:1 gas oil ratio is 32 parts gas to 1 part oil, so there is less oil in the mixture.
once you drop the mixture to 32:1(or whetever works best for you), there will be less oil coming out of your exhaust.
but if it's dripping where a screw is at, it's because the screw is not sealing in the threads. it may be tight, but oil can still seep past the threads. take the screw out and put some blue loc-tite on the threads and put it back in, let it dry for awhile, and that may seal it up good enough to stop the oil from dripping.
no matter what you do, oil will always drip from the exhaust. if you get this sealed up, the oil will just move further back and end up dripping out of the main exhaust exit...or wherever it can find a pathway out of the exhaust. remember, exhaust is pushing the oil out of the exhaust pipe.
the reason ios because when the gas/oil mixture is burned in the cylinder, some of the oil is not burned. it's converted to an oil mist, which gets to the rings and bearings for lubrication. some of the unburned oil mist will be blown out of the engine on the exhaust stroke. eventually, this mist will condense back into liquid oil, and get blown out of the exhaust.
a rich/lean mixture has nothing to do with oil coming out of the exhaust. when you talk about a lean/rich mixture, it usually refers to the air/fuel ratio...not the fuel/oil ratio.
