I hate to say it ,but I think your right.The case "can't have oil in the case",there is "no clearance"(place for the oil to reside in any volume),the connecting rod will hit the oil every time around throwing it up and through the intake ports,
The oil for lubing will draw from the carburator beacause the motor is doing everything it does normaly(still has an intake stroke w/working ports) except the power will be supplied by a burst of steam when the piston reaches the top,So the lower drain for acumilating steam blow-by(condenced Water) may be all that is needed drain when stopping the motor for a period of time maybe w/a catch cup below it(might be a oiley water residue like the inside if a ford dipstick tube)
Originally Posted by happycheapskate
I don't think you will be able to keep much oil or water in the crankcase, even if the engine is run at a very low RPM. It is a 2 stroke, so the passing of vapor from the bottom up through the top will blow it out of the engine.
Since its not ICE, though, you can't really "flood" it, so I guess it won't hurt, just might make a leaky mess.
Best of luck, I think this is really cool. What will you use for oil? You can get 5gallon buckets of hydraulic oil or gear oil from tractor farming stores. Maybe something made for irrigation lines might work.