This is fantastic, thank you for all of the advice. My primary bike is a '73 Schwinn Varsity and my daily beater/rain bike is a fixed gear cruiser I built out of trash parts, so I welcome the challenge of rebuilding it. I now won't dissemble the engine much other than to check the piston, and I coincidentally already have the proper chain for the motor. Here is a shot of the spark plug, in person it doesn't look as wet/shiny as the picture.
I think that's oil, but it could be carbon. Either way, the project will be a learning experience even if I jump ship before it's running again. From what I can tell of the bike, it was built by someone who was into modding and projects, and then owned by someone who didn't take care of it and let it fall into disrepair. I say that because of the custom front fork, the back wheel was relaced with motorcycle/wheelchair spokes, and on the other side of the bike a heavy duty drum brake was installed. However, the bike is dirty and in overall disrepair (hence my guess about the second owner). I will keep you all updated and in a few weeks will be back with a painted and polished asphalt assassin.