Too much oil still in the case will cause a no-start scenario. If that thing has been repeatedly flooded and then sat and the fuel evaporated, it left the oil behind. a lot of oil from the looks of it.Oil is supposed to accumulate in the case for lubrication purpose of the crank bearings as well as the piston needle valve bearing and lubing the cylinder, rings, etc....The fuel burns off leaving the oil behind on these parts because 2 stroke oil is formulated and designed for this very purpose.
If it were me, I would take the engine off the bike, remove the head/cylinder, and flush the bottom with some unmixed gas, mineral spirits, or kerosene. Good chance to inspect he cylinder for any potential mechanical damage.
Then I would replace the 2 base gaskets with fresh ones, and give them a coat in aircraft sealant number 3 or some other semi-curing gasket dressing so that it ensures a better seal and won't seep as much oil.