man al is right, there are so many engines out there...what does he have?
friction drive 2 stroke or a frame mounted h.t.?
it could be a slipping clutch (if a 2 stroke h.t.).
it could be a misadjusted roller on a friction mount.
sounds to me like he has a typical 2 stroke h.t. engine and his clutch is slipping.
it could also be a blown crank seal, allowing fuel and oil to get onto his clutch pads.
there are so many variables....we need more precise info.
skyliner, if the chain was not attached to the engine and rear sprocket, he would not be able to peddle start it, like he said that he can.